ECB Cuts Base Rate to 0.25%

Pity AIB variable customers wont see a benefit of the rates falling, AIB only seem to care when the rate goes up!
 
Reduces the interest on a €100,000 mortgage at Danskes best ever rates to €62.50 per month!!! :D
 
Interesting.

Who is lending money to loss making mortgages at these rates?
 
Is the cut in the ECB rate good or bad for the Irish Economy as a whole?

Ok so - good for consumer who has a tracker? but bad for the bank as the their already pressed margin in these is pressed even more?

Do this mean that banks further restrict lending and even less money flows into the overall economy?

Thanks.
 
bugler said:
Surely this makes the prospect of a hike in the SVR even more likely in the near future?
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I'd be willing to bet there will be a rise in the next 6 months, with all of the big 3 doing so within 2-4 weeks of each other.
 
.. and what's the bet that when ECB rates start going back up, SVR will also continue to rise. These feckers are eating in to my precious overpayments!
 
leonmahon said:
.. and what's the bet that when ECB rates start going back up, SVR will also continue to rise.
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Considering that SVR's were been increased when base rates were falling I'd say that's a reasonable bet there Sherlock. :D
 
valiant said:
Is the cut in the ECB rate good or bad for the Irish Economy as a whole?

Ok so - good for consumer who has a tracker? but bad for the bank as the their already pressed margin in these is pressed even more?

Do this mean that banks further restrict lending and even less money flows into the overall economy?

Thanks.
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I think that the cost of funds to the bank goes down as well. That should allow the banks to lend more
 
cremeegg said:
I think that the cost of funds to the bank goes down as well. That should allow the banks to lend more
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Lending by banks to the private sector has been falling in recent years. This combined with fiscal tightening and households deleveraging is precisely why as an economy we are going nowhere at the moment.
 
It has already had the effect of devaluing the Euro against Sterling and the Dollar, so should give a boost to exporters.
 
Reckon there is a good chance of a cut next year as well,bringing the repo rate to :) 0%.
 
It's funny how people now take extremely low interest rates for granted. I reckon the average tracker holder has benefited by about 15% of the value of their mortgage to date. This could rise to 30% if interest rates stay low for the next 3-4 years. That's about €10k p.a. for about 8-9 years on a €300k mortgage.
 
Yeah, tracker holders are well used to low interest rates at this stage and do take them for granted. Obviously, rates will rise again. However, with each passing year, the impact of such rises is diminishing - as the vast majority of current repayments is currently going towards capital as opposed to interest.
 
ronaldo said:
Yeah, tracker holders are well used to low interest rates at this stage and do take them for granted. Obviously, rates will rise again. However, with each passing year, the impact of such rises is diminishing - as the vast majority of current repayments is currently going towards capital as opposed to interest.
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Very good point, much of the benefit is also going towards paying down capital as opposed to just reducing the current level of repayments. Some quick sums suggest that interest rates of 1% rather than 4% on a €300k mortgage will reduce repayments by about €6k per annum, but also reduce capital outstanding by an extra €3k p.a., leaving a nice additional bonus once interest rates rise again.
 
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