ECB cuts interest rates again giving mortgage holders another boost!

The European Central Bank cut interest rates today and muted the possibility of further policy easing as concerns over lacklustre economic growth supersede worries about persistent inflation. It was the fifth ECB rate cut since June and markets expect two or three more this year. ECB rate cuts combined since July 2022 are now significant for borrowers.
This fifth 0.25% drop, would mean a typical tracker mortgage holder on 0.5% above the ECB rate with an outstanding mortgage of €180,000 will see a total reduction of €145 per month on repayments arising from the reductions, including the special one-off reduction of 0.35% in September last.
Beyond tracker mortgage holders, those on variable rates and those coming off fixed rates are dependent upon what their lenders will do. However, it is expected with increasing competition and the ECB’s approach that lenders will review their fixed and variable rates.
About eight in every ten new mortgages taken out in recent years were for fixed terms, short fixed terms, typically three years. About 80,000 of these are exiting those rates this year.
Irish lenders have the capacity to offer better long-term fixed interest rates, which were only relatively new in the market when they were pulled as the ECB began raising rates from mid-2022.

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