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Cost of a tracker falls €9,000 in seven years

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Tracker mortgage holders are paying an average of €9,000 less a year than they did in 2007, research shows.

A consumer study from business body IBEC reveals the true extent of the massive savings enjoyed by tracker mortgage holders recently.

The monthly cost of an average tracker mortgage taken out in 2007 has fallen from €2,090 to €1,324 - a saving of €766 a month, or around €9,000 a year, IBEC calculated.

Those figures apply to mortgages of €440,000. Larger mortgages enjoy even bigger savings.

The majority of the mortgaged population have benefited, since 60pc of Irish mortgages are trackers.

"Falling tracker mortgage rates have been a major boost to the most indebted households over recent years," said an IBEC spokesperson.

Their cost has plummeted because they are tied to the European Central Bank's headline interest rate, which has been slashed in the wake of the recession in an effort to boost eurozone spending.

Last week the ECB cut interest rates to an unprecedented 0.05pc. This compares to a high of 4.25pc in July 2008.

IBEC's research also provides an interesting insight into the complex relationship between Irish people and property prices.

It found a 10pc rise in house prices leads to a 1.1pc rise in household consumption. This means spending leaps when we think our homes are worth more. This 1.1pc increase is very high by international standards.

Irish Independent