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ONE OF EUROPE’S most prominent banks, with operations in Ireland, has predicted that the European Central Bank will cut its main interest rates next week – in a move that will benefit tens of thousands of mortgage holders.
Danske Bank, which owns National Irish Bank, has said a fall in the level of manufacturing output throughout Europe could mean the ECB will opt to stimulate lending by cutting its main rate by 0.25 per cent.
The next meeting of the bank’s governing council – being held in Frankfurt next Wednesday – could be the forum at which Danske believes the cut could be imposed.
That would be good news not only for manufacturers and industry, who may be given slightly cheaper access to bank loans, but also to mortgage holders – particularly those on tracker mortgages.
Any cut to the ECB’s rates would take almost immediate effect on their mortgages, at a time when Central Bank figures show the number of households falling into arrears as being continually on the rise.
The effect of a 0.25 per cent cut would be to reduce the monthly payment by €13.48 for every €100,000 outstanding on a 30-year mortgage (though this amount fluctuates depending on the value and term of the loan).
The cut would be the third since Mario Draghi took over as the ECB’s president in November, though the first of this year; the Italian oversaw cuts from 1.5 per cent to 1.0 per cent in his first two months in charge, but has not budged since.
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If it is cut good news for those on tracker mortgages but there is no guarantee that the banks will pass on the reduction to others if the ECB does drop it’s rate.
God bless trackers
Eh I dunno what a tracker mortgage is
It’s a bit like a guided missile only slower and doesn’t make whoo whoo noise.
Except in Canada where it’s a financial instrument used for a hunter to buy a Winnebago.
Its one where the interest rate directly tracks the interest on loans from the ECB, the banks are losing a fortune on them because the ECB rate is so low at the moment.
The gov need to step in now and force the banks to cut their rates and pass the ECB rates on … Like what they did to PTSB
Irish permanent rates are still much higher than most! The government don’t want to put pressure on them! They need them to make money! Don’t for one moment think the Government care about individual mortgage holders!
What government ?
That would be great news! A tracker mortgage is where the rate you borrow on is attached to the ECB. Example if the ECB is at 1% then one may have taken out a mortgage at maybe 1% on top of the ECB, which just the moment means the rate is 2%. The rate will automatically reduce to 1.75% if the ECB dropped by its rate by .25%
I think we all know at this stage what a tracker is, he was just quoting the tv ad
There’s always one! lol
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