Michael Dowling: No one is predicting ECB base rates will return to the glory days of 0%

Tracker customers experienced a 4.5% increase in interest rates and their monthly repayments rose by €300 per month, an unprecedented increase in such a short period of time

There are 429,000 fixed rate customers, making up 60% of the market, who in 2023 saw the value of home loans on fixed rates of more than 5 years increase by 25%

As expected, the European Central Bank (ECB) left rates unchanged following its July meeting and we wait in anticipation of the September meeting to see if the ECB reduces rates —0.25% at most will be under consideration.

The likely autumnal rate reduction of 0.25%, combined with the of 0.35% reduction following an Operational Framework Review to realign the overnight and deposit rate, will be a very welcome boost for tracker mortgage holders. Fixed and variable rate customers will have to wait on decisions of individual banks.