Mortgage holders are in line for further savings this week as it is widely expected that the European Central Bank rate will be cut to 1%.

If this rate does come into effect the average mortgage is expected to drop by €80 per month. It will be interesting to see if all mortgage lenders will pass on the full amount to their customer. At the start of this month First Active and Ulster Bank pass on only 0.25% of the 0.5% drop. If this happens again, we advise shopping around and remortgage with a different lender.

Good news for Mortgage holders / seekers as the latest ECB rate decrease is beginning to be passed on. A variable rate of just 2.75% is now available mortgages with a loan to value less than 50% loan to value. European Central Bank president has said policy makers haven’t decide whether to stop cutting interest rates below the current 1.5% record low.

With the low rates and developers jumping through hoops for buyers, offering cars, a year of your mortgage paid and more, First Time Buyers are beginning to show interest once again.

Good news for Mortgage holders as the European Central Bank Rate (ECB) was slashed by another 0.5% on Thursday bringing the base rate to a record low of just 1.5%. With this reduction, a variable rate of just 2.75% will be available in the coming weeks.

Permanent TSB, KBC Homeloans, EBS, Irish Nationwide and Halifax and Bank of Scotland (Ireland) said the full half a percentage rate reduction would be passed on to customers with variable and tracker rate mortgages.
Bank of Ireland and ICS Building Society also confirmed this afternoon that they will pass on the full ECB rate decrease across their tracker and standard variable rate mortgage products, for new and existing owner-occupier customers.

National Irish bank confirmed it won’t be passing on the rate cut to its variable rate holders and both Ulster Bank and First Active confirmed they will pass on just 0.25%. For Mortgage holder with these lenders we advise switching to a more competitive lender. A quarter percent difference over the term of your mortgage could result in thousands of additional interest being paid.

This is a question we get regularly from clients. Here is a simple explanation which I hope you find useful.

The Annual Percentage Rate (APR) on a mortgage is higher than the interest rate because the APR takes into account some of the costs that you pay when getting the mortgage loan. It is defined as “being the total cost of credit to the consumer expressed as an annual percentage of the amount of credit granted”

The purpose of an APR is to give you an indication of the real cost of your borrowings over the life of your loan so that comparisons can be more easily made. You see, sometimes you may be offered a special discount or an attractive start up rate for a fixed rate period at the beginning of your mortgage loan agreement and once the fixed period has expired the rates may increase. So the rate you pay at the outset doesn’t actually tell you the annual percentage interest rate that you may have to pay in the future.