Mortgage interest rates for some homeowners could hit a crippling 8% later this year, adding thousands to people's bills.

Many vulture funds are already charging more than 6.5% on some of the 130,000 mortgages they hold.

However, that rate "is before the next planned, expected increase in March", finance expert Padraic Kissane told the Dáil's Committee on Finance yesterday.

And some homeowners face even further increases, according to Sinn Féin finance spokesman Pearse Doherty.

"People have contacted me and they're already on 7.5%, and it's going to go to 8%," he said.

In Association with

A jump to 8% from the current average variable rate of 3.85% on a €300,000 mortgage would send repayments up €713 a month, from €1,547 to €2,260.

David Hall, of the Irish Mortgage Holders Organisation, told TDs and senators: "Irish financial and mortgage consumers have less rights and representation than badgers in Ireland. Many mortgage consumers are now mortgage prisoners not able to get fair mortgage interest rates... as they were sold to a vulture."

Mr Hall said the average discount on loans sold by banks to vulture funds "probably in Ireland was 50%", adding: "When we're talking about a vulture fund having bought something and charging someone extortionate interest rates, you know on a €300,000 loan they bought that for say €150,000... None of the main Irish banks offered those individual options to customers or write down the loan to 50% - that's the despicable nature of what happened."