ICS has decided to increase its variable mortgage rates in response to rising borrowing costs in general.
The lender, which is owned by non-banking financial group Dilosk and controls around 5% of the Irish mortgage market, said it would raise variable interest rates by 0.5% to 1.25% for homeowners and tenants. buyers. leave the products from October 1st.
This decision should be followed by other mortgage providers, which will increase the financial pressure on households here. So far, most major lenders have left their floating rates unchanged in response to the European Central Bank’s (ECB) half-point hike in July. Frankfurt is set to opt for another half-point increase next month as it battles to rein in record inflation across the bloc.
ICS said homeownership rates would rise by 1.25 percentage points across all loan-to-value (LTV) brackets. This would allow, for example, to increase the rate of a variable rate mortgage for a homeowner whose LTV is less than 70% from 2.45% to 3.7%.
Variable buy-to-let rates will increase by half a percentage point in the LTV brackets, he said, from 3.75% to 4.25% in the case of LTVs below 60%.
This is the second mortgage tightening by ICS since the ECB began raising interest rates.
Earlier this month it capped the amount of new home loans it was willing to approve at just 2.5 times the borrower’s income, as well as introducing more onerous loan-to-value restrictions for first-time buyers and those who exchange. It also lowered the maximum loan amount it was willing to consider and set minimum income caps for applicants – €50,000 for a single person and €100,000 for a couple.
“Lenders continue to experience significant increases in the cost of funding due to continued volatility in international financial markets. Like all prudent mortgage lenders, ICS Mortgages must ensure that our mortgage products are funded in a stable manner, taking into account the changing interest rate environment,” said Ray McMahon, chief commercial officer of ‘ICS.
“ICS Mortgages remains committed to offering competitive mortgage interest rates. With these rate changes, we continue to offer attractive variable rates for homeowners and rental mortgage holders. We will continue to regularly review our position on variable interest rates. Our fixed rates remain unchanged.
“All existing variable rate clients will be contacted to describe the effect of these changes on their ICS Mortgages product.”