herald

Monday 20 August 2018

Mortgage, fuel and phone charge hikes hitting consumers

NEW hikes in mortgage, fuel costs and phone charges are driving up the cost of living at its fastest rate since 2008, leaving thousands of hard-pressed homeowners under severe pressure.

The EBS Building Society has become the fourth lender to increase its mortgage interest rates this year with a rise of 0.6pc in its standard variable rate announced today bringing it above 4pc.

Permanent TSB is also to charge up to 9pc to a group of customers to whom it is obliged to offer a fixed rate.

These rises are in addition to a raft of new phone charges by Eircom which have been described as "sneaky" by the Consumers' Association.

Soaring mortgage and fuel costs are driving up the annual rate of inflation. Petrol costs are 14.8pc higher than a year ago while diesel costs are up 17.7pc in the same period. Oil prices have risen by 28.7pc.

The EBS hike, which will add almost €34 a month for every €100,000 borrowed, takes effect next month and follows increases by Permanent TSB, Ulster Bank and KBC Bank.

Permanent TSB, which has effectively suspended fixed-rate mortgages, is obliged to offer a rate to some customers who are coming to the end of their fixed-rate contract.

They will now be offered a rate of 8.75pc if they want to fix for five years -- 3pc higher than the last rate. The two-year rate will rise to 7.25pc and the seven-year rate to 9.1pc for those who have a 20-day option to fix again.

Eircom has announced increases of up to 60pc in some of its phone charges and customers will now have to give one month's notice written notice by email, letter or fax if they want to quit the service.

The company has expanded expensive peak hour rates by two hours each day from 7am to 7pm and the minimum charge for connecting a call will rise by 60pc to 9.5c.

Chief executive of the Consumers' Association Dermott Jewell has accused the company of putting shareholders' interests ahead of customers saying "they are determined to extract as much money as possible from loyal customers".



inflation

The trade union movement says the continuing price increases have undermined the Government's claim that welfare and pay cuts could be justified by falling inflation.

"People are now being squeezed between the pincers of falling pay and remorseless price rises, yet the Government continues to attack people's incomes," said ICTU economic adviser Paul Sweeney.

Experts also warned that rising hospital costs will push up inflation in the coming months as health insurers pass these costs on to their customers.

Overall in the past year mortgage interest has gone up 24.1pc, hospital services by 11.5pc, electricity by 3.2pc and phone and communications by 3.1pc, according to the latest figures from the Central Statistics Office.

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