The ECB is set to start increasing the interest rate in September 2019. The current ECB rate is set at 0.4%. This cannot remain in place and an increase is inevitable. It will see the the interest rates rise over a number of years and eventually settle. ECB rate could rise as high as 3.5% ‘ – Dermot O’Leary, Chief Economist, Goodbody. The rates should rise in 0.25% increments over a number a months. This would neman that the interest rate could be 0.25% by end of 2019, 1.25 by end 2020 and 2.5% by end 2021 and eventually lead to a high of 3.5%.
The ECB rate usually changes in small steady increments to avoid frightening the markets.
What does this mean for the mortgage interest rate?
It will start to see an increase in interest rates for all mortgages unless you are on a fixed rate mortgage. The tracker mortgages will move in line with these ECB rates changes.
As the ECB rate has not changed in a long time mortgage holders are not familiar with interest rate changes. This will mean an increase in your monthly payments. It is a good idea to start planning for this now. Talk to your financial planner and get an idea on how the interest rate will affect you and your monthly outgoings.