ECB raises interest rates for a third time increasing them by 0.75%

Homeowners on tracker mortgages will feel the impact of today's increase immediately. The rate hike could add approximately €37 per month in extra repayments for each €100,000 borrowed. It means a homeowner on a €200,000 tracker mortgage will see an extra €888 in repayments each year.

Homeowners on variable interest rate mortgages will likely see increases in repayments as lenders move to raise their rates in response to the ECB's decision. So far, Ireland's banks have absorbed the rate hikes but will not continue this indefinitely.

In a statement, today Bank of Ireland confirmed its tracker mortgage customers would see a 0.75% increase immediately. 

"No decision has been made in relation to other products. The Bank continues to keep all rates under ongoing review, and will clearly communicate any future rate change decisions at the appropriate time," the bank said.

The ECB is expected to announce a further rate hike in December as it continues efforts to rein in inflation which remains at almost 10%.

In a statement today the ECB said: "The Governing Council took today’s decision, and expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target."

"Inflation remains far too high and will stay above the target for an extended period."

AIB has already raised rates on its fixed-rate mortgage products but has yet to alter its variable rates.

The combined ECB rate hikes this year have raised its main refinancing rate to 2%, the highest level since 2011.

Market analysts expect ECB interest rates to peak at around 3% next year, with some predicting a peak of 3.25% by the middle of next year.