Mortgage holders could be hit with three more rate rises this year, experts say.
his will mean home owners on trackers and variable rate mortgages will have to pay hundreds more euros a month.
And it will mean fixed rates for new buyers will become more expensive and the cost will shoot up for those coming to the end of an existing fixed rate who want to lock in again.
Rate rises are one of the reasons a recent MyHome.ie/Davy report found housing affordability was at its worst for 14 years as property prices hit almost eight times the average salary.
Three more European Central Bank (ECB) rate rises will add another €720 a year to repayments on every €100,000 owed on a typical tracker mortgage.
This is a tracker mortgage which has 15 years of repayments left and is on a 1 percentage point margin above the ECB rate.
Another three rate hikes will mean the annual cost of repayments on the €100,000 will have increased by €172 a month since the ECB began increasing rates last summer.
That works out at an extra €2,000 on every €100,000 still owed, based on the key ECB refinancing rate going to 3.75pc.
Three more rate rises are likely to be passed on in full to those whose mortgages have been sold to vulture funds, pushing some of them to default.
Vulture funds are already charging their customers up to 6.5pc, with some charging 7pc. And they generally will not offer fixed rates.
Mainstream banks have held back on hiking their variable rates, but have been increasing the cost of fixed rates, with non-bank lenders pushing through a string of rate rises.
Economist Austin Hughes said: “I think the ECB will raise rates by 0.5 percentage points in both February and March.
“I think there will be a further 0.25 percentage points rise in May. A further 0.25 percentage point rise cannot be ruled out in June.”
Dr Tom McDonnell of the Nevin Economic Research Institute think tank also expects the ECB’s refinancing rate to hit 3.5pc this year.
“In truth they may end up going further,” he said. “Sentiment is very hawkish at the bank.”
Goodbody Stockbrokers economist Dermot O’Leary said the refinancing rate may even go to 3.75pc. “The most recent messaging represented a significant step up in the ECB’s concerns,” he said.
AIB economist Oliver Mangan said: “The ECB’s clear guidance suggests rates could rise to 3.5pc this year and futures contracts are moving close to pricing in such an outcome.”
But he said markets still anticipate that rates will be cut by 0.5 percentage points in 2024.
Mortgage servicers such as Pepper and Start and the funds that own the loans have been heavily criticised for passing on all four ECB rate rises in full to most of their customers.
And most of those, whose mortgages are owned by vultures, are unable to switch lender as many have been in arrears in the past, or have a split mortgage, in which part of the loan is put aside with repayments being made on it at a later date.
Some of the people whose loans were sold have already seen their rates go as high as 6.5pc, with some now at 7pc.
They have no option to fix, prompting consumer advocates to say they are “mortgage prisoners”.
Figures from the Central Bank indicate there are just under 200,000 mortgage accounts on a tracker rate.
Another 150,000 or so are on variable rates.
Tracker rates are hit every time there is an ECB rate rise.
The main banks have not increased their variable rates, but non-bank lenders and vulture funds have been pushing up variable rates.