Finance Ireland hikes variable rate to take it as high as 6.4pc

Mortgage rates continue to rise.

Charlie Weston

NON-bank lender Finance Ireland has become the first lender to react to this month’s European Central Bank rate rise.

It is pushing up its variable rate for existing borrowers and new customers by 0.25 percentage points.

This will take its variable rates for residential borrowers to between 6pc and 6.4pc, depending on the loan to value.

This means its variable, and that of ICS Mortgages, will be the highest mortgage rates in the State outside of the vulture funds.

In March Finance Ireland increased its variable rate by 1pc.

Finance Ireland said: “Following last week’s increase in interest rates by 0.25 percentage points by the ECB, Finance Ireland has announced an increase to its variable rate mortgages of 0.25pc with effect from June 12 next.”

There is no change to the lender’s fixed rates.

It said the majority of its mortgages are on fixed rates.

Finance Ireland said it has a range of mortgage offerings, and customers were advised to contact it or a broker or to view the Competition and Consumer Protection Commission (CCPC) website if they think they may qualify for a different product or a different rate on their mortgage.

In March non-bank lender ICS Mortgages announced another large rise in its mortgage rates.

The lender increased its fixed mortgage interest rates for owner occupier mortgages by between 0.6pc and 1pc.

And it is hiked its variable rates by 1.25 percentage points across all loan-to-value (LTV) bands.

The increase in the ICS variable rate of 1.25pc meant these range from 5.95pc to 6.2pc, making them the dearest suite of variable rates on the market at the time, apart from the vulture funds.

Last month mortgage lenders Haven and EBS raised their variable rates – announcing increases of 0.35pc on certain products.

Haven announced an increase of 0.35pc to its variable rate mortgages effective from May 18. It also pushed the rate on an 80pc loan-to-value variable rate mortgage to 3.5pc.

Haven fixed mortgage rates remain unchanged.

EBS raised the interest rate on its buy-to-let variable mortgage to 5.43pc.

In February AIB’s variable mortgage rates went up by 0.35pc.

Mortgage broker Michael Dowling said the Finance Ireland’s rate rise was not unexpected.

He said the increase brings the rates charge by Finance Ireland very close to those charged by ICS Mortgages. They now both range from 6pc to 6.4pc, depending on loan to value ratio.

He said the Finance Ireland move will add €16 a month to repayments on every €100,000 borrowed.

Mr Dowling added: “These rates are 3pc more expensive that the cheapest variable rate currently available with AIB.

“Any borrower still with Finance Ireland and ICS should be switching provider immediately,” he said.