Cost of borrowing set to hit historic low

THE cost of borrowing is set to hit a historic low as the European Central Bank (ECB) prepares to cut interest rates by up to half a per cent.

With rates set to fall to 2.25% following an announcement today and with banks and building societies expected to pass on the reduction within days, borrowing will be not have been so cheap here since the beginning of the 1950s.

But while the news is good for mortgage holders and other borrowers a 30-year mortgage of €200,000 could cost €56 less per month or €672 in a year savers will see the returns on their nest eggs slump.