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Marc Coleman: Austerity is not to blame, it is overspending that is the culprit

To those that have shall be given more. From those that have not, shall be taken away. Sometimes the Bible is a cruel book, and last week there was an old testament biblical cruelty to the mortgage market. Since the crisis began, those on variable mortgages have been hit by a succession of discretionary rate rises by crisis-hit Irish institutions. As a result a huge gap between the "have trackers" and "have no trackers" has opened up. With a rate gap as high as 3 per cent in some cases, those with typical €250,000/25-year variable rate mortgages may now – depending on the institution – be paying up to €450 a month more than their tracker cousins.

Last week many variable rate holders suffered a 40 basis points hike. But tracker mortgage holders will, thanks to the European Central Bank's rate cut on Thursday, enjoy a 25 basis (quarter of a per cent) point cut. For the holder of the aforementioned "typical" mortgage, that's €35 less a month or €420 less a year. OK so the Government will gobble most of that up in property tax. But in net terms it still leaves the tracker market about €170m a year better off. It's just a pity that those who need help most get rate hikes while those that need it least get cuts.

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