Cost of mortgage goes up by €1,000 overnight amid calls for support for hard-pressed homeowners
Sinn Féin have called for the Government to introduce more mortgage interest relief to help households pay the spiralling cost of mortgages.
This week saw the latest hammer blow for homeowners when the ECB hiked interest rates by half a percentage point again.
It immediately meant that 250,000 tracker mortgage customers saw their annual repayments go up by an average of €1,000 overnight.
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And the bad news will follow for fixed and variable rate customers too as the main banks always pass the increase on down the line as well.
One of the ways the Government can ease the pain of the further cost of living blow is to increase mortgage interest relief.
Sinn Féin’s finance spokesman, Pearse Doherty, said: “The ECB increased its interest rate again this week, the sixth rate hike since July.
“This further rate hike will immediately impact more than 250,000 borrowers who have seen their monthly repayments increase by hundreds of euros since January.
“It will also hit the pockets of thousands of borrowers whose mortgages were sold to vulture funds without their consent.
“Despite false promises by the Taoiseach and Government ministers, these mortgage holders are worse off as a result of these sales, with no option to switch or fix their rates, and will face interest rates as high as eight percent in the next few weeks.
“Mortgage-holders will be paying thousands of euros more in interest this year – households that are already struggling under the cost of living crisis.
“Others will see their interest rates increase in the coming period.
“Already, Irish mortgage-holders are charged interest rates that are 50 percent higher than the European average.
“In the grip of a cost of living crisis, it is now time to introduce targeted and temporary mortgage interest relief to cushion the blow of these rising interest costs – this relief could absorb a portion of these interest costs.
“Already the government allows landlords to claim tax relief against 100 percent of their mortgage interest with further tax cuts reported to be on the way.
“As the ECB prepares to increase interest rates again today, the time has come to introduce this temporary and sensible measure to support those who are really struggling under the cost of rising interest costs.”
The current basic interest rate is 3%, so the latest hike brings the rate up to 3.5%
A homeowner with a fairly standard €300,000 mortgage over 25 years would have to pay almost €80 more a month with the new rate, or close to €1,000 extra a year.
If your mortgage is for a home in a city centre it would not be uncommon to have a mortgage for €600,000, meaning the repayments will jump by €150 to €160 a month.
The average value of a mortgage in Ireland stands at just under €300,000, at €284,623.
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