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Mortgages could rise four times

STRUGGLING homeowners face crippling repayments as four hikes in mortgage payments could be introduced by the end of the year.

The European Central Bank has signalled it may push up rates as early as next month -- affecting hundreds of thousands of mortgage holders.

Ultimately it could mean that many more householders would be forced into defaulting on their payments.

As little as a 0.25pc rise in rates would add another €45 to the monthly repayments on a €300,000 mortgage.

Individuals with a €400,000 mortgage will pay another €52.50 monthly or €630 each year.



ARREARS

In addition to the 400,000 people on tracker mortgages, up to 200,000 people on standard variable rates will also be hit as any rise will be passed on to these borrowers. Recent figures from the Central Bank found that more than 44,000 householders are at least three months behind with repayments.

Up to now, a rate rise had not been expected until September at the earliest but yesterday's comments from the ECB are the strongest signal that the ECB is preparing for an immediate interest rate hike.

The move is being made to tackle the wave of inflation that could be triggered by rising commodity and oil prices, European Central Bank president Jean-Claude Trichet said.

A hike from next month from the record low of 1pc was "not certain, it is possible", he said.

clairemurphy@herald.ie