ICS Mortgages said it is raising fixed home loan rates by as much as 0.45 of a percentage point, stoking fears this could be the beginning of a fresh wave of hikes for Irish homeowners.
The move follows an increase in its market funding costs in recent months as financial markets price in the prospect of the next rates move from the European Central Bank (ECB) being upward.
The revised rates, ranging from 0.1 per cent to 0.45 per cent for owner-occupiers, depending on loan-to-value banks, will apply to ICS’s three-year and five-year fixed rates products from January 9th, said the brand, which is owned parent Dilosk.
Customers on existing fixed-rate products will not be affected.
Non-bank lenders like ICS Mortgages led the last wave of rate hikes across the mortgage market in early 2022 as they were caught out by a spike in rates on bond and wholesale markets in anticipation off an aggressive series of ECB rate hikes to combat inflation.
Unlike banks, such lenders do not have access to cheap household deposits for funding. Still, mainstream banks ultimately started to increase their rates after the ECB started increasing official rates in mid-2022.
Another huge corporate tax take to AI’s next phase: What’s in store for 2026?“While we continually seek opportunities to support borrowers through competitive pricing and innovative products, these fixed rate adjustments reflect the realities of the increase in swap market pricing over the past two months,” said Ray McMahon, chief commercial officer at ICS.
While mortgage rates declined across the market as the ECB reduced its benchmark deposit rate from 4 per cent to 2 per cent over 13 months to last June, traders are increasingly betting that the next policy move could be a rate hike.
They have been emboldened by comments along these lines from ECB executive board member Isabel Schnabel in early December, amid upside risks to inflation – even though she stressed that rates are likely to remain stable for the time being.
ICS last raised fixed rates in late 2022.