Finance Ireland raises mortgage interest rate by up to 2%

Firm is Ireland's largest non-bank lender

Following the rate increase, a 20-year fixed rate mortgage will be priced from 4.6% to 5%.

Ireland's largest non-bank lender Finance Ireland is to raise its variable and fixed rates for mortgage products by between 1.5% and 2%.

The new rates will come into effect immediately for new business. Mortgages applications which have been approved and which are drawn down before close of business on Friday of this week will continue to avail of existing rates.

In a statement, the firm said that following the rate increase, a 20-year fixed rate mortgage will be priced from 4.6% to 5% depending on the loan-to-value percentage band.

In July, Finance Ireland completed a €50m equity raise with support from two global investment managers and last week the company published its accounts which reported pre-tax profits (for 2021) of €28m(up from €9.7m for 2020). The accounts also showed that in 2021 the company reported new lending of over €1bn – an increase of 54% on 2020.

"Over 80% of our loan applications in the past year have been for fixed terms of 10 years or more as customers look to lock in certainty in a period of widely forecasted interest rate increases," Finance Ireland said in a statement. "Overall, we have funded strong mortgage volumes through this year, however these interest rate increases we are implementing are a direct result of significant increases in funding costs over recent months."