Politicians have criticised the latest 0.25 per cent rate rise by the European Central Bank.
Fine Gael Finance spokesman Richard Bruton said although inflation had risen by 5.2 per cent, young families were burdened with a rate of at least 15 per cent, due to spending on mortgages, fuel, childcare, and health insurance.
"The CSO says a typical household spends one seventh of its income on these items, which account for four points out of the total increase of 5.2 per cent. However, the stark reality is that for many young families these items absorb well over 50 per cent of their budgets," he said.
"Mortgage repayments now represent 53 per cent of average income, and in Dublin they represent 75 per cent. The Central Bank recently confirmed that fewer than half of young people can now afford to buy a home of their own and this is set to get worse," he added.
Labour Finance spokeswoman Joan Burton called on the ECB to explain why it has opted for seven successive rate hikes.
European inflation has remained at 1.8 per cent in both January and February, which is below the target set by the European Central Bank," she said.
"Today's interest rate increase will hit many Irish families hard, particularly those at the lower end of the market who were barely able to get approval for an affordable home and people with high levels of debt, particularly credit card debt.
Ms Bruton said that small Irish businesses would also be hit by the rate hikes, coupled with the "excessive profit margin" that banks charged on a lot of their lending to small business.
The Green Party described the Government's approach to the current housing debt problem as a "rabbit in the headlights".
Green Party Finance spokesman Dan Boyle said "This cycle of rate rise has insidiously increased the costs for mortgage holders, already bearing the price of buying housing that has been hugely inflated by the policies pursued by this Government.
Mr Boyle accused the Government of sleepwalking into uncertain economic times.
"The Government's seeming indifference to this continuing cycle of ECB rate increases will certainly cause damage to other sectors of the economy. Higher mortgage costs will lead to less disposable income, leading to less spending and a reduction in economic activity."
Labour Seanad Finance Spokesperson Derek McDowell accused the ECB of wanting to "squeeze the life" out of the European economy and Irish mortgage holders.
"By fuelling expectations that interest rates will continue to rise by as much as three quarters of a point this year alone, the ECB is creating the kind of uncertainty in the market that will turn a soft landing into a hard fall."
Fine Gael environment spokesman Fergus O'Dowd used the news of the hike to call for stamp duty reform.
"There is no doubt that the pain caused by this rate hike would have been alleviated by reforming stamp duty but Fianna Fáil and the PDs refused to grab that golden opportunity in the Budget," he said.
