ONE of the country's biggest mortgage lenders has hiked its rates in a further blow to homeowners.
Permanent TSB has confirmed that its customers will be hit with a 0.5pc hike from Tuesday week.
Several other banks are expected to follow suit in the coming weeks, with the increase set to add nearly €70 a month to a mortgage of €250,000.
The rise in rates comes despite the fact that the European Central Bank (ECB) has frozen rates for the past 14 months.
If, as expected, the ECB begins to increase its key rates soon, then there will be even more pressure on mortgage holders.
Mortgage experts say that the increases will push many homeowners to the pin of their collars.
Yesterday's announcement by Permanent TSB will directly affect around 80,000 homeowners. Other lenders are expected to take similar action, meaning that up to 300,000 people could be hit before the end of August.
The bad news came as the country's two main banks passed a "stress test" carried out by the European Union.
Bank of Ireland and AIB are strong enough to withstand a double-dip recession and a sovereign debt shock, according to the EU. The test found that all but seven of 91 European banks are in a decent position to fight off another debt crisis.
It had been feared that some banks needed to fail for the exercise to be accepted as credible, and some analysts still argued that the results showed the tests weren't rigorous enough.
Finance Minister Brian Lenihan last night welcomed the results.
"The Government is pleased to note the results of the EU-wide stress test of banks, which Bank of Ireland and Allied Irish Banks have passed because of the decisive and prompt action taken earlier this year," he said.
Mr Lenihan added that the "demanding capital assessment took account not only of the impact of transfers to the National Asset Management Agency but also of the potential losses on other parts of the banks' loan book".