Irish mortgage payments to fall as some banks refuse to pass on rate cut.
European Central Bank officials meeting in Frankfurt today voted to reduce the benchmark interest rate by a quarter-percent to .75%, a record low for the eurozone.
Tracker mortgage holders will immediately benefit from the announcement. There are an estimated 400,000 tracker mortgage holders in Ireland.
Those with standard variable rate mortgages (of which there are an estimated 200,000) are also likely to benefit, although this will depend on the individual bank and whether or not they will actually pass on the rate cut to mortgage customers.
Already, Allied Irish Bank (AIB) has announced that it will not be passing on the rate cut to its standard variable rate mortgage holders, citing a need to retain the money itself.
Other lenders are expected to announce their decisions in the coming days.
Below is a breakout of the outcome of a 25 basis point cut.
|Mortgage Amount||Current Payment (2.00%)||New Payment (1.75%)||Decrease|
|Based on 30-year term, ECB + 1%|