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Families face mortgage cuts

A MORTGAGE rate cut of 0.25pc -- and possibly as high as 0.5pc -- is to benefit hundreds of thousands of homeowners this week.

The European Central Bank (ECB) is expected to cut its key interest rates for the second time in two months as the EU debt crisis threatens to spiral out of control.

While speculation grew today that the reduction could be as high as half a percent, it is considered more likely to be 0.25pc.

However, even if it is just a quarter-point cut, struggling mortgage payers are unlikely to have to wait very long for further reductions.

A drop of 0.25pc on Thursday will mean repayments would fall by €45 a month for a €300,000 mortgage.

If the higher cut was to be implemented, monthly instalments would plummet by €90 for the same amount of borrowings.

However, the reductions will only affect those on tracker mortgages, while property owners on fixed rates are stuck with their higher costs.