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Interest hike on way from ECB

IRISH mortgage holders face a potential hike in interest rates this year as experts warn that the European Central Bank is considering an increase.

Industry experts have warned that lenders should anticipate a minimum of one rate increase within the year.

Ciaran Phelan, CEO of the Irish Brokers Association (right) , has criticised the forecasted hikes and said that what consumers need now is clarity and certainty in an already-stagnant property market. "If the ECB also increases its rate towards the end of the year as predicted by some experts, variable mortgage could rates hit 6pc."

However, Joan Henry, Head of Research at Savills, said that the key Irish banks are now effectively State owned and thus essentially funded by the taxpayers.

"Any suggestions that variable interest rates will end up at 5pc independent of ECB increases, when the ECB rate is 1pc, is simply outrageous," she said. "These assumptions have no economic basis that can be defended and should be rejected out of court immediately by all concerned."