Tracker rate 0.5% increase as ECB rate increased (ECB rate was negative)

[phester]

HI All,

Just a quick question when the ECB went negative the bank set the ECB rate to zero. so I had a ECB + 0.75 % rate of mortgage.

Now that the ECB have increased rates they have moved the rate straight to 1.25% which is not the margin ECB + 0.75

Am I missing something

 

[skrooge]

The ECB had a number of rates that apply to different things. The deposit facility went negative, however, the main refinancing rate - the rate trackers follow - never went below zero.

So the main refinance rate which had been at 0% increased by 0.5%. So your tracker should go from 0.75% to 1.25%.

Official interest rates

The three official interest rates the ECB sets every six weeks as part of its monetary policy to steer the provision of liquidity to the banking sector.

www.ecb.europa.eu

 

[Gordon Gekko]

Scrooge is correct.

Separately, some mortgages have “floors” for the reference rate where the ECB/EURIBOR/LIBOR(sic) rates falls below zero, and some don’t.

e.g. I had a loan which was 3 Month Euribor plus 0.5% which fell to about 0.1% at one stage. Equally, I had a loan which was 3 Month Euribor plus 1.5%, with a floor of 1.5% for the rate charged.

 

[phester]

understood, and do these always move in tandem. I.E. for each ECB 0.5% increase all figures move together.