Low mortgage interest rates to continue: IMC

Irish homeowners can look forward to at least another 12 months of historically low mortgage interest rates, Irish Mortgage Corporation economist Geoff Tucker said today.

Irish homeowners can look forward to at least another 12 months of historically low mortgage interest rates, Irish Mortgage Corporation (IMC) economist Geoff Tucker said today.

The European Central Bank (ECB) is now unlikely to make any changes to Euro-zone rates until the middle of 2006, he added.

Earlier today the governing council of the ECB decided to leave the repo rate – the ECB’s key interest rate – unchanged at 2%. It is now two years since the ECB last changed interest rates in the Eurozone.

Tucker said there is no sign of a sustained recovery in the Eurozone economy.

"The OECD recently cut its growth forecast for the Euro-zone to 1.2% for 2005, down from 1.8% in 2004. Domestic demand remains weak, both economic sentiment and business confidence are declining, and the unemployment rate remains stubbornly high at around 9%," he said.

"The ECB is unlikely to increase interest rates any time in the near future given the poor growth prospects for the Eurozone economy."