ECB to cut rates to record low

Homeowners are expected to get some good news today with the ECB due to cut interest rates to a record low.

The 0.25% cut will put an extra €300 a year into the pockets of the average householder on a tracker mortgage.

The latest reduction will take the lending rates to below 1% for the first time.

Davy economist Conall MacCoille said the effective lending rate for banks was about 0.3%, but those with tracker mortgages would be the real beneficiaries. Those with variable rate mortgages would have to see if their lending institution passed on the cut.

“The only immediate effect the rate cut will have is for tracker mortgage holders,” he said.

There are about 400,000 tracker mortgages in Ireland. These will benefit immediately from any cut in the ECB rate.

“There is no guarantee that banks will pass on the new rate to variable customers. It is up to the financial regulator to decide whether or not to force banks to pass on the rate,” said Mr MacCoille.

Meanwhile, Finance Minister Michael Noonan has expressed confidence that this year’s tax take will meet expectations after figures for the first six months of the year showed revenues €507m ahead of target. Tax take exceeded €17bn, 3.1% above expectations.