An increase of mortgage interest rates in the coming months will lead to higher monthly repayments for up to 450,000 homeowners in the country.
There has been speculation that interest rates could rise as early as July of this year.
This will be a further financial setback for hard-pressed homeowners grappling with the rising cost of living and increasing fuel costs.
The increase will hit those on variable and tracker mortgages.
Labour finance spokesperson, Ged Nash said a real plan to combat an imminent and sharp rise in variable mortgage interest rates is urgently needed to assist up to 450,000 homeowners.
Deputy Nash said: “Given the prevailing high average mortgage interest rates in Ireland, we believe urgent action is needed to bring rates in line with the Eurozone average. Caps on mortgage interest rates must now come into sharp focus as far too many people are struggling to get by and we need to make living more affordable for people.
“The Labour Party previously supported legislation proposed by Fianna Fail in opposition to combat rising interest rates. We believe the very real prospect of a rate rise means that caps on the rate of borrowing, particularly for mortgages, must be seriously considered by Fianna Fail in Government.
“Now more than ever, we need to revisit the German style ‘Sparkasse’ model of small, community banks lending to personal customers and small businesses. Our credit unions also need to be helped to do more. There is a real risk that a further lack of competition in the Irish banking sector, brought about by the exit of Ulster Bank and KBC, will see interest rates charged by dominant banks rise even further.
“All the evidence suggests that public banks lend more and at cheaper rates than private banks. The State must now step-in and get serious about setting up a public banking model that will be a key pillar to building a more customer-orientated banking sector,” Deputy Nash said.
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