Permanent TSB is planning to announce the first round of a big rise in home loans rates that will hit up to 80,000 of its customers on variable interest rates.

The move is likely to be followed by the other financial institutions, hitting homeowners hard.

The Sunday Tribune understands that the lender will announce a half percentage increase by the end of the month, increasing its variable interest rate to 4%.

But industry experts warn all banks will increase their variable home loan rates to at least 5% this year even before taking into account any increase in rates by the European Central Bank later this year. The expected ECB move means there will be "a double whammy" for the 300,000 borrowers o n variable interest rates and about 400,000 homeowners on tracker rates.

Michael Dowling, senior director at the Independent Mortgage Advisers' Federation, said rises in variable mortgage interest rates will be even more significant because it comes at a time when an ECB rate rise is back on the agenda.

"Even ignoring what the ECB does, variable interest rates will rise sharply as the banks try to boost revenues," he said.

Dowling warned that borrowers on significantly cheaper tracker mortgages are also struggling.

The Financial Regulator's latest arrears figures showed that, at the end of September, nearly 40,5000 of the 789,000 residential mortgage borrowers had missed three or more payments.

But, as first revealed by the Sunday Tribune, the figures are widely recognised as underestimating the distress of households because they do not include an estimated 35,000 borrowers who have needed to negotiate a lower monthly payment.

Combining the figures suggests that about 10% of the €117bn mortgages the banks have lent to households in the Republic are under some sort of stress.

The Mortgage Arrears and Personal Debt Expert Group recommended last summer that the regulator amend its reports to include the number of mortgages that have been rescheduled.