Editorial: Tracker holders get their own little windfall
There may have been only one Lottery winner celebrating in Bundoran yesterday, but 375,000 tracker mortgage holders throughout the country should also have been smiling at a smaller, but significant, bonanza that comes with the decision of the European Central Bank (ECB) to cut its interest rate to a record low of 0.15pc.
On the other side of the coin, 200,000 other home-owners, those who are on variable rates, will be less than elated at the two-tier system that has grown up in the mortgage market and which leaves them at a distinct disadvantage, paying 4pc more for their mortgages, a considerable difference given the size of many home loans. Indeed, these mortgage holders are being used as cannon fodder by the banks and other lending institutions who have increased rates to try to claw back some of the losses they are suffering on tracker mortgages sold during the boom and now costing the banks a fortune.
For the last couple of years, the ECB has been striving to stimulate stagnant eurozone economies and unlock billions held by EU savers in what are now loss-making savings accounts. Since 2008, ECB interest rates have come down from 4.5pc to today's historic low of 0.15pc. The holders of tracker mortgages are collateral beneficiaries of the policies of Mario Draghi.