Homeowners face higher mortgage payments

HOMEOWNERS are facing a squeeze over the next 12 months as rising interest rates will hike up typical mortgage repayments by €140 per month, Bank of Ireland warned yesterday.

Borrowing rates would be 1% higher within a year and could begin their upward journey as early as next month, the bank’s chief economist Dan McLaughlin said. He warned there was a “50-50” chance of rates going up by 0.25% in December, after more than two years stuck at record lows.

A 1% hike would send monthly repayments on a 30-year, €250,000 mortgage from €1,065 to €1,205. Dr McLaughlin also predicted further pain for borrowers in early 2007 when he expects rates to rise by a further 0.5%. This would increase typical repayments by another €70.