Finance Ireland, the largest non-bank lender, is increasing it lending rates up by as much as 2%.

Finance Ireland, which has 5% of the Irish market, about 36,000 mortgages, announced it will raise variable and fixed rates for its home loans by between 1.5% and 2%, depending on loan-to-value.

The new rates will come into effect immediately for new borrowers.

Mortgage applications that have been approved and are drawn down before close of business on Friday will be at the existing rates.

Interest rates campaigner David Hall, of the Irish Mortgage Holders Organisation, said: "It is a big jump but it’s only the start. "It’s going to cause great difficulty with everything else going up at the same time."

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After the rate increase, a 20-year fixed rate mortgage will be priced from 4.6% to 5% depending on loan-to-value percentage band.

A rate increase from 3% to 5% means monthly payments on a 25-year €300,000 mortgage will increase more than €300 a month from €1,416 to €1,734.

Finance Ireland last week announced profits of €28m for 2021, an almost trebling from its €9.7m profit for 2020.