Irish Examiner: Homeowners face a 1% interest rate hike in 2011

We were quoted in the Irish Examiner today in an article by Niamh Hennessy, extract is below.

“The Irish Mortgage Brokers expect banks to push up interest rates by another 1% this year. Any move would add €1,280 a year to a €200,000, 25-year loan. They said rate increases may start this month.

Operations manager with the Irish Mortgage Brokers, Karl Deeter, said: “In short, 2011 is likely to be a washout in the Irish mortgage market, lending will be restricted and only done at higher margins.

“In 2011, we are certain that rates are going to continue their bank-led movement upwards.”

Mr Deeter said that fixed rates may be temporarily removed from the market, or offered on a limited basis or even priced out of the market. “The state-controlled banks in particular will be forced to make some painful decisions on interest rates they charge to customers,” he said.

It is expected that variable interest rates will start to rest at or above 5% by 2012. It is also expected that repossessions could rise by as much as 300% this year.

Irish Mortgage Brokers said it believes banks will be forced to shed staff and close branches in 2011. It expected 20% to 25% of AIB branches to close and 10% to 15% of Bank of Ireland and EBS branches to close.

House prices will also continue to fall this year.”

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