THE current uncertainty surrounding the single currency; has huge implications for Irish consumers over a wide range of areas. But for borrowers, the outlook for monetary union is now a central consideration.
The dilemma is clear. If EMU goes ahead on time, then the outlook for interest rates is good. If the project falters, then higher borrowing costs are likely to be on the cards.
But it is unlikely to become clear until at least this autumn whether the EMU project will be delayed, abandoned or - still probably the most likely option - proceed on time.
While there are arguments that the former two options would not have the dramatic implications for Irish interest rates which has been supposed, it would at least herald a considerable period of uncertainty.
Mr John Fitzgerald, research professor at the ESRI, believes that the chances of monetary union going ahead have lengthened over the last month. He insists, however, that he still believes it will go ahead on time. If it does not, interest rates could rise by 2 or 3 percentage points which "would be enough to bring the housing boom to an end", he predicts.
According to Mr FitzGerald, a postponement or delay to EMU would mean that house prices would fall because of this uncertainty around interest rates. If it remains on track, on the other hand, then we know that interest rates cannot go up much and may eventually fall, he added.
However, not all economists share the same views. Mr Jim O'Leary chief economist at Davy Stockbrokers argues that an EMU delay or postponement would be good for inflationary prospects, and as a result may have less impact on interest rates than many commentators assume.
According to Mr O'Leary a postponement of EMU would lead to a rise in the pound against sterling - and even against the deutschmark - which would dampen down inflation by reducing import prices. In turn, this should help head off any major rise in interest rates.
Nevertheless, he believes that the housing market could suffer some fallout due to uncertainty, if the process were delayed.
While the return of emigrants from abroad and the large number of new jobs mean there is a sizeable demographic boost underlying the buoyant housing market, the prospect - for lower interest rates has also played a part.
An important part of any market is the expectation that most people have about its future. Until recent weeks, the majority of Irish people felt that interest rates would be on the way down over the next year.
Even the rate increase last month did little to dent this theory. However, if the single currency unravels, expectations will have to be seriously revised. At the very least we can expect an initial period of turbulence.
A straw poll of economists and financial advisers by this newspaper found few who said they would recommend a first time buyer to move into the market now. All agreed that it would be more sensible to wait until the picture became clearer in autumn. The risk, of course, is that by then prices could be even higher.
What about existing borrowers? It would seem sensible to ensure that you are not overstretched in your borrowing and could easily afford another increase of a couple of percentage points in interest rates.
Those on variable rate mortgages could also consider looking at fixed rates. Mr Peter Kelly of First National Building Society, said it would be worth looking at a switch. Those buying investment properties, in particular, should consider fixing, according to Mr Kelly.
According to Mr Michael Torpey, treasurer at the Irish Permanent it "makes an awful lot of sense" to look at fixed rates.
"Until recently the popular belief was that rates will only be going down and down. But we have seen the UK and US raise rates and on top of that if we start looking at a delay or a softer euro it will put upward pressure on rates. So if you can fix for three or five years at 7.25 per cent, that is pretty attractive."
Longer fixes of seven or 10 years may be more suitable for investment properties, he said. The rates on these are far higher, running at close to 10 per cent.
Mr FitzGerald also believes that fixing should be top of people's agendas.
"Given there is a possibility that EMU will not go ahead anyone going for a big mortgage should fix for at least two years and preferably three."
But he would not recommend a longer fix, he said. "Three is probably safest, three years from now is midway through 2000 by which stage if EMU has happened you will have paid too much and if it hasn't some of the initial reaction should have had time to settle down."
Mr Jim Power, chief economist at Bank of Ireland, said all borrowers should look at their ability to live with the worst case scenario.
"Either way the run up to EMU will be extremely uncertain and we are probably only seeing the tip of the iceberg now. If rates going up by 3 points could force you out of your house or business, there is no question but that you should fix."
