Kieran Coughlan: Protecting your farm loans from soaring interest rates

By having a plan to tackle financial problems as best one can, and by being upfront with your lender, the prospects of a credit squeeze undermining the sustainability of your business are much reduced

For a farmer with a €250,000 land loan with 12 years to run, an interest rate rise of 3% would see monthly repayments go from €2,081 to €2,452. 

The ECB interest rates have rocketed up over recent months from the lending rate of 0% about nine months ago to 3.5% as of March 22. 

Annual inflation is running at 6.9%. This is far above the ECB’s long-term target of 2% and commentary from the ECB has suggested it will keep increasing lending rates until inflation rates are brought into line with expectations.