HOMEOWNERS have been offered fresh mortgage hope, as reduced inflation in the eurozone has paved the way for another cut in interest rates.
New figures show that inflation in the 17-member bloc fell back in December -- meaning another cut in European Cental Bank (ECB) rates could come as early as next week.
The ECB looks to inflation when deciding which direction interest rates should go in.
Economists said the inflation figures gave the ECB the leeway to ease rates when it meets again next Thursday.
However, others expect central bankers to wait until February or March to drop rates.
Eurozone interest rates came down in November and again in December, leaving a homeowner on a €200,000 mortgage paying €60 a month less in repayments. Another cut in rates would save a €200,000 mortgage holder €90 in monthly repayments.
Consumer prices in the countries sharing the euro rose by 2.8pc in December, down from 3pc in November, October and September.
Economists said the slower price growth was probably due to lower energy prices.
Further falls in eurozone inflation are now expected by economists -- meaning the likelihood of more interest rate cuts soon.
Nick Kounis, of ABN Amro bank in London, said: "The favourable medium-term inflation outlook is a green light for further ECB rate cuts over the coming months. We expect the refinancing rate to reach a low of 0.5pc."
Economist Austin Hughes of KBC Bank in Dublin said the European central bankers were likely to hold off on any cut this month. But he said the situation was "finely balanced and it is certainly not impossible that there will be another rate cut next week".
Meanwhile, new research shows that Permanent TSB, Ulster Bank and the EBS are charging their variable rate customers way over the ECB rate.
The variable rates charged by Permanent TSB are more than 4pc above the ECB rate of 1pc, Frank Conway of personal finance website MoneyCoach.ie said.
Since 2009, several mortgage lenders have increased the rates they charge their standard variable rate customers.
These rises came well before the ECB began increasing its rates earlier last year, only to reduce them in the November and December rate cuts, he added.
"While it is important that banks get back to a stable financial footing, it is also important that they do not risk the repayment capacity of individual mortgage customers who hold standard variable rate loans," said Mr Conway.