An exclusive Sunday Tribune poll has found that, following five rate hikes in ten months, 57% of people are feeling the pinch, with 27% reporting a big squeeze on their household budgets.

Those hit the hardest tend to be in their 20s or 30s and living in Dublin.

The rising cost of borrowing is taking its toll on the housing market, with a big tail-off in the rate of price growth. Prices crept up by just 1% in August, with the slowdown evident in all sectors of the market for the first time in many years, according to the Permanent TSB house price index. Since then, the European Central Bank has hiked interest rates again, bringing the base rate to 3.25% from 2% this time last year.

"There is a clear trend of slowing price growth in the Irish housing market following the recent series of ECB rate increases, " says Niall O'Grady, head of marketing at Permanent TSB.

The slowdown has been most dramatic at the top end of the property market, where many houses have failed to attract any bidders at recent auctions.

The interest rate squeeze has also been blamed for caution by savers as their SSIAs mature, with no evidence of the spending sprees that had been widely expected.

According to research by AIB, two out of three people have yet to touch the money saved over the past five years. When people do spend, they tend to shop sensibly, choosing home improvements over holidays and second-hand cars rather than brand-new models.

"There's a fair degree of caution out there and the survey results are backed up by what we're seeing on the ground, " says Hugh O'Keeffe, head of savings and investments at AIB. "It may be a reaction to the interest rate increases we've seen since December, with more on the way. That's a fairly significant jump in mortgage costs."

However, there was some good news for borrowers last week as it emerged that AIB and Bank of Ireland are still holding back some of the ECB rate hikes from customers with standard variable rate mortgages.

Even though the latest move by the ECB has added 0.25% to the cost of borrowing, AIB has raised its standard variable rate by just 0.1% while Bank of Ireland and its broker-based subsidiary, ICS, have added 0.2% to their standard rates.

This is the latest move by the big mortgage lenders to hold on to more of their customers by offering them a better deal. It means that, while ECB rates have jumped by 1.25% since last year, AIB, Bank of Ireland and Permanent TSB have added just over 1% to their standard variable mortgage rates (see table).

But the margin squeeze is unlikely to be enough to stop customers switching to lenders such as National Irish Bank and Bank of Scotland (Ireland), which are offering rock-bottom rates to borrowers who have equity built up in their homes.

NIB shook up the market last week with a switcher mortgage that charges a margin as low as 0.5% over ECB base rates. This is significantly less than standard variable rates, which typically operate off a margin of 1.35%.

"This is a call to action for all mortgage-holders, particularly those on standard variable rates, to check out what their mortgage is costing them, " says NIB chief executive Andrew Healy. "There are around 650,000 mortgage-holders in Ireland today and many are still paying the same interest rate as when they first took out their mortgages."