Friday 24 November 2017

Homeowners hit again as Irish Nationwide to hike mortgages

The increase will add around €30 to the monthly repayments for every €100,000 borrowed. Over a full year this amounts to €360. Photo: PA
The increase will add around €30 to the monthly repayments for every €100,000 borrowed. Over a full year this amounts to €360. Photo: PA
Charlie Weston

Charlie Weston

Irish Nationwide is to become the sixth lender to increase the mortgage interest rate it charges existing and new customers.

And EBS and Haven have also hiked the rates charged to those who opt to take out fixed-rate mortgages.

Irish Nationwide's rate on standard variable mortgages will rise by 0.54pc tomorrow, the Irish Independent has learned. The increase will add around €30 to the monthly repayments for every €100,000 borrowed. Over a full year this amounts to €360.

It comes despite the European Central Bank earlier this month leaving its benchmark interest rate unchanged at 1pc for the 15th consecutive month.

It is the second time this year that Irish Nationwide has hiked its standard variable rate.

Around half of the society's residential mortgage holders are on standard variable rates, with another 30pc of its domestic mortgage holders on other types of variable rates which are also rising by 0.54pc.

Martin Noonan, head of mortgages at Irish Nationwide, admitted that this meant the rate hike would impact on around eight out of 10 of its residential mortgage borrowers.

The building society, which has the lowest rate in the market for those who want to fix their rate, is also changing the way it prices fixed-rate mortgages.


The move will make it more expensive to fix for those whose mortgage amount is high compared with the value of their home.

Irish Nationwide, which will cost the State around €3.25bn to bail out, currently has a fixed rate of 3.15pc for new customers who opt for its three-year rate, provided they are borrowing 70pc or less than the value of the property. The fixed rate is 3.5pc for those borrowing more than 70pc of their home's value.

Existing customers had been charged 3.99pc to fix for three years. From tomorrow those borrowing between 50pc and 80pc of the value of their home will be charged a rate of 3.45pc.

Asked if there would be further mortgage rises, Mr Noonan said he hoped that this was the last rate hike for the time being.

EBS Building Society has also increased the rates it charges for new customers who want to lock in to a fixed rate.

The cost of locking in to a three-year fixed rate has risen by 0.24pc to 3.99pc for new customers. Existing customers will be charged 4.70pc for fixing over three years.

EBS director Dara Deering defended the fact that existing customers were being charged 0.7pc more for fixing than new customers. The gap had narrowed from 1pc earlier in the year, she said.

Mortgage broker Karl Deeter said existing customers were being charged more to fix because they were trapped and unable to switch to another lender as the switcher market was virtually dead.

EBS's Haven division is pushing through rises in fixed rates from today for new customers who want to fix. The cost of fixing will rise by up to 0.35pc.

Also tomorrow, KBC Bank's standard variable rate for new and existing customers rises to 3.85pc.

A string of other lenders have increased mortgage rates so far this year -- including Bank of Ireland and its ICS division; AIB and Permanent TSB.

Irish Independent

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