Early Christmas as second cut coming for mortgage holders
Second reduction on way in December
Published 04/11/2011 | 05:00
MORTGAGE holders are in line for two more interest rate cuts after yesterday's reduction, giving a total saving of €90 a month on the average home loan.
A second cut is now expected as early as December after the European Central Bank unexpectedly lowered rates by 0.25pc.
The ECB acted as its new president Mario Draghi took over from Jean-Claude Trichet.
The 400,000 people on tracker mortgages will benefit within weeks from lower monthly repayments.
But there was good news for some customers on standard variable rates after two lenders promised to pass on the cuts to them.
The 0.25pc reduction -- the first for two-and-a-half years -- represents a saving of €30 a month to a family with a €200,000 mortgage.
Permanent TSB said it would pass on the decrease to both its tracker and variable rate customers, while KBC Bank said its variable rates would fall from December 1.
Other lenders will now be under huge pressure to lower their variable rates.
Banks have discretion over whether to pass on rate cuts on variables, while tracker rates automatically move when ECB rates change.
Finance Minister Michael Noonan said all lenders should pass on the reduction to those with variables.
He said that regulator Matthew Elderfield had made the need to pass on rate cuts clear to the banks.