“This surprise move will result in monthly mortgage repayments falling by about €10 on a €200,000 or €120 annually” said Mr. Frank Conway.
Standard Variable Rate mortgage holders are unlikely to benefit from the surprise rate cut as lenders can choose to not pass on ECB rate cuts to those customers.
Bad news for savers
The rate cut is bad news for savers as lenders are likely to further reduce deposit interest rates from their present lows.
“The news for savers is not so good. This is a market where many deposit institutions have already significantly reduced the level of interest they pay to, in some cases, fractions of a percent. On top of that, savers that do earn some interest income are liable for DIRT of 41%. Savers are now persona non grata” said Mr. Conway.