Ecb cuts rates to1%
As expected the ECB has reduced its base rate to 1%.This is good news for borrowers .
We continue to live in a strange recessionary environment where house prices and rates are falling the same direction.
Tracker rate holders will automatically have their mortgage rate adjusted for the fall in rates.
Homeowners with variable rate loans from AIB, Permanent TSB, Bank Of Ireland, KBC Bank, ICS Building Society and EBS will benefit from today's cut.
Ulster Bank and First Active will not pass the reductions on to variable rate mortgage holders. Halifax /Bank of Scotland says only customers with variable loans incorporating the bank's 'price promise' element will see the reductions passed on.
National Irish Bank and ACC, are reviewing the situation .National Irish bank expanded into the mortgage market over the boom offering extremely low loan to value tracker rates and they will find it very difficult to make money on this element of their book.
Ulster Bank and First Active did not pass on the last rate and their position will be watched closely.We have noticed a significant level of inquiries from clients of this Group and it seems likely that many will try and move their mortgage to a cheaper lender.
Unfortunately standard variable rates are not available to many switchers with a number of lenders now offering ltv variable rates where the rate depends on the property value.Our mortgage calculator automatically calculates these rates .
Whilst variable rates are historically low there has been some upward movement in long term rates.The good news is that the Ecb and the IMF are forecasting a return to growth in 2010 and one would expect that this will lead to higher rates.
Given this scenario we see some excellent value in some lenders 3 and 5 year fixed rates.
in regard to residential investment properties the recent pattern has been for lenders not to pass on rate reductions and this is set to continue.