The European Central Bank (ECB) has cut its interest rates for the fourth time since June.
The latest cut of a quarter of a percentage point (0.25%) will be welcome news for those on tracker mortgages as their monthly repayments will fall.
However, savers can expect to lose out as the level of interest paid of savings could also fall.
While only those on tracker mortgages will benefit from the latest rate cut immediately, it will put pressure on Irish lenders to reduce their fixed and variable rates.
About 130,000 people on tracker mortgages here will benefit from the latest cut in interest rates.
Each reduction in the ECB’s refinancing rate reduces repayments by €13 a month for every €100,000 owed on a tracker.
This ECB rate cut is the fourth reduction since it increased rates 10 times up to September last year.
The latest round of cuts sees the deposit rate – the ECB’s main rate – fall to 3%. The ECB’s rates-setting council also reduced its main lending rate, off of which tracker mortgages are priced, at the same pace, to 3.15%.
Average new mortgage rates in Ireland are currently 4.03%, which is the sixth highest in the euro zone according to the Central Bank.
Their latest report found that Irish mortgage rates fell again in October to their lowest rate since May 2023.
New mortgage rates here fell to 4.03% in October, down slightly from 4.08% in September and down from 4.27% in October of last year.
The average euro zone mortgage rate also fell in October to stand at 3.52%.
Rates continued to vary hugely across the euro zone area from a rate as low as 1.77% in Malta to as high of 4.89% in Latvia.
The Central Bank figures also show that the total volume of new mortgage agreements increased from €930m in September to €1.1 billion in October.
This marked a 16% increase in monthly terms and a 28% rise from October 2023.
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