Some customers with Ulster Bank on standard variable mortgage rates are set to be hit with nearly €100 in increased payments following a rate increase of 0.6 per cent by the bank.
Ulster Bank has said it will increase its standard variable mortgage rate by 0.6 per cent to 4.95 per cent from 1 July following a review, the Irish Examiner reports.
Experts have told the paper the hike is “substantial” and that many mortgage holders will not be able to afford an increase that will add almost €100 onto monthly repayments on a €300,000 loan.
Writing in the Irish Independent, Charlie Weston says the bank is responsible for around one in seven mortgages in the market, accounting for around 120,000 mortgage customers.
The paper says repayments on every €100,000 loaned from the bank over 20 years will rise by €32 from €625 to €657.
It is the second increase on the bank’s variable rate this year having hiked rates up by 0.5 per cent in March.
The lender said that higher funding costs were to blame for the rises of 1.1 per cent in total this year.
RTÉ reports that the rate increase will be communicated to customers directly and will be advertised in the press.
Speaking to Conor Pope in the Irish Times the chief executive of the Irish Brokers Association Ciarán Phelan said that some variable mortgage rates could hit 6 per cent before the end of the year.
The paper adds that almost 50,000 residential mortgages were in arrears at the end of March.
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