James Cox

Homeowners on variable or tracker rates look set to face higher repayments soon.

The European Central Bank (ECB) is expected to indicate today that it will be raising interest rates by a quarter of one per cent from July.

The ECB move is an attempt to dampen inflation which is running at over 8 per cent in the eurozone, way above the bank's target of just 2 per cent.

Economist Jim Power believes a number of interest rate rises are on the cards.

Mr Power told Newstalk: "I think we'll see another quarter of one per cent increase in September, and it's not going to end there. I would expect over the next 12 months in total ECB interest rates are likely to increase by around 2 per cent."

Mortgage adviser Michael Dowling said that the two ECB rate hikes, leading to a half a point increase in mortgage rates, would add €80 a month to the cost of households servicing a mortgage.

This will amount to €960 for a full year and the increases are likely to hit up to 740,000 Irish households.