ICS announces interest rate hike for its variable rate customers

The increases mean the owner of a home with an ICS variable rate mortgage with a loan-to-value rate below 70% will see their interest rate increase from 2.45% to 3.7%.

Mortgage firm ICS is to raise its interest rates, adding 1.25% to the rate for all owner-occupier mortgage holders.

The increases will come into effect from October 1. In a statement, the firm said the increase was due to significant increases in the cost of funding resulting from ongoing volatility in the international capital markets.

ICS said it was also raising mortgage rates on all buy-to-let variable rates by 0.5%.

The increases mean the owner of a home with an ICS variable rate mortgage with a loan-to-value rate below 70% will see their interest rate increase from 2.45% to 3.7%.

The increases will not impact on the fixed rates of existing customers or customers with a valid fixed rate loan offer.

"Like all prudent mortgage lenders, ICS Mortgages must ensure that our mortgage products are funded in a stable manner, which takes account of the evolving interest rate environment," Ray McMahon, Chief Commercial Officer, ICS Mortgages said.

"ICS Mortgages remains committed to offering competitive mortgage interest rates. With these rate changes, we continue to offer attractive variable rates for both owner-occupier and buy-to-let mortgage holders. We will continue to review our position on variable interest rates on an ongoing basis," he said.

ICS holds a small share of Ireland's mortgage market but its move to increase rates is expected to be followed by other providers in the coming weeks. It follows the decision in July by the European Central Bank to raise its interest rates by half a per cent with a further half per cent increase expected next month.

The move brings to an end the decade-long era of low interest rates in the EU. Even small increases in mortgage repayments will place households under further pressure as they grapple with the ongoing cost-of-living crisis.