Mortgage pain as rates set to rise by up to 1%

HOMEOWNERS are likely to be hit by increases in mortgage interest rates in the first few months of the new year as lenders aim to claw back some of their massive losses.

Banks could increase standard variable rates (SVR) by up to 1% this year, which would add €130 a month to a typical €250,000 mortgage.

Karl Deeter, operations manager with Irish Mortgage Brokers, predicted in 2009 that banks would increase rates by 1% in 2010, which they did.