European Central Bank on course to cut rates to 1.75 per cent next year
Tens of thousands of Irish mortgage holders are likely to see another dramatic fall in their repayments over the next 12 months, with a 'dovish' European Central Bank ECB on course to cut rates to 1.75 per cent next year, analysts have predicted. Photograph: iStockAt its last meeting of 2024, the ECB confirmed it was cutting rates by 0.25 per cent, the fourth such cut since last June and a fifth if a 0.35 per cent “technical adjustment” announced in September is included.
If rates are cut at the same level next year, they will be at 1.75 per cent by the end of 2025 and at that level some tracker holders would be paying in excess of €5,000 less than they were at the height of the interest rate cycle.While the ECB moves will put pressure on Irish banks to cut fixed and variable rates, centralised rate cuts or increases do not always transfer directly on to the Irish market.
She said recent rate cuts by banks “already reflect expectations of further ECB reductions. Still, there is significant variability in rates across the market, with the lowest starting at 3 per cent and the highest reaching 6.4 per cent.” Mr Cassidy cautioned that savers are likely to start seeing their rates fall. “Irish households currently have almost €160 billion resting on deposit. But the majority of the money is still in accounts that pay little to no interest. So I’d really encourage people with savings to lock into the higher rates while they’re still available.
Interest-Rates Mortgages Tracker-Mortgage Mortgage Davy-Group
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