Are more mortgage rate increases likely after PTSB hike?
PTSB today announced it is increasing interest rates on its fixed-rate mortgages - the first of the main pillar banks to announce such a hike since the ECB introduced two rate rises between June and September.
PTSB has announced interest rate hikes on its fixed-rate mortgages, becoming the first major pillar bank to do so since the European Central Bank's recent two rate increases. Inflation for the year is projected to be around 3.4%, significantly higher than the desired 2% target. To align with this, the ECB has introduced two additional interest-rate hikes, adding up to half a percentage point.
This has forced banks to pay more to borrow money, a change that has now come into effect with PTSB's mortgage rate increase. The lender has raised rates on its fixed-rate mortgage products by an average of 0.3 percentage points, ranging from 0.2% to 0.35% based on the mortgage term, loan size, and property value. No changes are being made to existing PTSB fixed rates or variable rates.
Customers who have a mortgage offer letter can still secure their current rate until January 19, 2027. The move by PTSB has prompted speculation that other banks might follow suit, particularly due to the anticipated further interest-rate hikes from the ECB. AIB recently lowered rates on certain mortgages, which may be an attempt to attract new business.
The ECB's continued rate increases could make it more challenging for other banks to maintain low rates, as their borrowing costs rise as well.
Written by urgent.news from RTE News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
