The ECB's recent rate cut of 0.25 percentage points aims to help tracker mortgage holders by reducing their monthly repayments. Experts suggest that first-time buyers might benefit from lower mortgage costs, enhancing their borrowing capacity. Ross Lynch notes that existing variable rate holders may not see immediate benefits unless lenders pass on the rate cuts, as many have resisted lowering these rates during previous cuts. The European Central Bank cites easing inflation and concerns about the sluggish eurozone economy as reasons for the cut, indicating further reductions may follow.
"This latest reduction will mean monthly repayments have fallen by close to €100 a month for a typical tracker mortgage customer with €100,000 left to pay since rates peaked in September 2022."
"Lenders have largely resisted cutting variable rates since the ECB started reducing its interest rates, remaining some of the highest in the market."
"Variable rates remain some of the highest in the market, so switching to a more competitive fixed rate may still be a better option."
"The governors are also cutting rates as they fear that the eurozone economy remains weak, and because of the economic risks from Trump tariffs."
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