Homeowners face prospect of higher mortgage payments and plunging house prices as banks look to reduce losses

HOMEOWNERS are facing a year of interest rate hikes and plunging house prices as banks look to claw back losses.

Mortgage experts are predicting that 2010 will see many of Ireland’s financial institutions increase interest rates and also that the European Central Bank (ECB) will increase rates from their record low of 1%.

This will come at a time when Ireland is struggling to recover from the economic downturn that has seen up to 50% wiped off the value of some properties.