ECB unlikely to change interest rates in near future
HOMEOWNERS with tracker mortgages look set to enjoy record low interest rates for more than a year.
The European Central Bank left its key lending rate on hold when it met today.
And ECB president Mario Draghi revealed that bank’s governing council discussed cutting rates even lower than the present 0.5pc rate.
The move means that close 375,000 mortgage holders with trackers do not have to worry about higher mortgage costs for ages, as the rate they pay is linked directly to the ECB interest rate.
A homeowner with a €200,000 tracker is now saving around €600 a year in repayments following two cuts in the ECB rate in the last year and a half.
The news that there will be no rate rise any time soon comes after banks, including Bank of Ireland, told TDs and Senators at an Oireachtas Committee that half of those in arrears are on trackers.
Draghi said today that interest rates will stay low for an extended period until the recovery is on stronger footing.
The ECB President also said the bank was ready to take action if financial markets tightened liquidity too much in money markets.
He said the bank could either pump out more liquidity or even cut interest rates.