Househunters have been advised to get a mortgage quickly as interest rates are set to rise. Experts have warned costs could go up after ICS Mortgages became the first provider to increase its fixed rates.

ICS announced a rate increase on all of its fixed mortgage deals with immediate effect. The rises in rates are a result of the increased cost of funding from the capital markets.

The move by ICS could spark other lenders to follow suit.

ICS still remains competitive relative to some of the pillar banks, with three-year fixed rates ranging from 2.25% to 2.55% and five-year fixed 2.4% to 2.69%. The pillar banks offer these rates at up to 3%.

The average first-time buyer’s mortgage drawn down in the past three months was €247,790, so the increase from ICS would result in a €26-per-month rise in mortgage repayments.

The difference between the highest and lowest rate on the market now stands at 2.55 points, which represents a potential saving of €135 a month for every €100,000 repaid over a 25-year term.