There was no good news for mortgage holders today as the European Central Bank held its main interest rate at a record low of 0.75%.
While there were some earlier indications that a New Year’s rate reduction could be on the cards, the ECB has since taken a wait-and-see approach as it assesses the economic outlook across the currency block.
There are an estimated 400,000 tracker mortgage holders in Ireland and a further 200,000 on less favourable standard variable rates. Tracker mortgage holders would have benefitted immediately from a rate reduction, as loans are directly tied to the main ECB interest rate. SVR customers on the other hand are subject to the commercial decisions of their mortgage lenders.
This is the sixth month in a row where the ECB has left its main rate on hold. Previous rate cuts are widely credited for easing the growth in mortgage arrears across Ireland.
European Central Bank head Mario Draghi has said that the struggling euro area should start growing again later this year – international equity markets have reacted positively to the news.