Most borrowers are likely to have news of higher mortgage repayments by the end of next week.

Most of the major lenders are considering putting up their mortgage repayments and are likely to move within days. However, none wants to be first and most are waiting to see what the competition does.

Already, however, Northern Rock has announced it is passing on the full rise to savers. It is now paying 4.25 per cent for amounts over £500 (€635).

Lenders AIB and TSB's Tusa, which did not put up rates after the rate hike by the European Central Bank late last year, will both increase rates this week and Tusa certainly is likely to raise by close to the full amount. That would bring its rate close to 4.5 per cent.

Other lenders are currently debating whether to pass on the rise immediately or wait for the next move in perhaps April before passing on a larger increase. For example, with a £75,000 20-year loan with Bank of Ireland at the moment the repayment would be £470. A quarter-point increase would bring that up to £480 and a half point, if the bank waited for the next rise, would be £490.

Other lenders are even considering raising borrowing rates by more than the quarter point which the ECB moved. They are pointing to higher costs in the wholesale market to try to justify this. However, one-month money has been trading around 3.4 per cent for a good while and this would be seen simply as an attempt to recoup the squeeze in margins which they suffered after the Bank of Scotland entered the market last August.

Most lenders, particularly those with one eye on their share price, are keen to take maximum advantage of rising interest rates in Europe.