All the main lenders pushed up rates for fixed mortgages last week, blaming an increase in the cost of money on wholesale financial markets.

The markets have already factored in a rate hike from the ECB when it meets in Paris on Thursday, while another quarter-point increase is expected in December. If the ECB moves as expected, it will have raised eurozone interest rates by 1.5% in 12 months.

Following last week's round of increases, Ulster Bank has emerged as the best place to fix for two years, with a rate of 4.49% guaranteed until November 2008. National Irish Bank has the lowest three-year rate at 4.69% guaranteed until 2009. NIB and EBS charge 4.85% to fix until 2011, the best five-year rate on the market.

Despite last week's increases, fixed-rate mortgages are still attractive compared to some lenders' standard variable rates, which are as high as 4.5% at First Active, Irish Nationwide, NIB and Ulster Bank. But the increases have opened a significant gap between fixed mortgages and the new crop of tracker mortgages, which are tied to ECB rates.

There is some evidence that higher mortgage costs are beginning to eat into house prices. According to the Permanent TSB house price index, growth slowed across the board in August, the first time this has happened in 2006.

The Central Bank also reported a slowdown in mortgage demand in August for the second month in a row.

The average working couple is having to find an extra 257 a month to cover rising mortgage bills since rates began to creep upwards last December, according to new research by EBS and DKM Economic Consultants.