Ecb reduces base rates to 2%

15 January 2009
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The European Central Bank has cut its benchmark interest rate by half a percentage point to 2% today,

The reduction of .5% will reduce mortgage repayments by approx € 25 euro for every €100,000 borrowing.

Monthly repayments on a mortgage of €200,000 will reduce by approx € 50 per month.

This news was expected and it equals the lowest base rates recorded in the Euro Zone.This is good news for existing and potential houseowners.

The latest rate reduction is aimed at stimulating business and investment . Whether this latest move will add confidence to a nervous environment is unknown. We expect rates to fall a little further but we do not expect to see rates going below 1.5% over the coming year.

Most lenders have indicated that they will pass on the rate reductions in full to variable rate mortgage holders.Tracker rate holders will automatically get the full reduction in line with their tracker loan agreement.

AIB, Bank of Scotland , Ulster Bank and First Active have indicated that they are passing on the half a percentage point interest rate cut in full to their variable and tracker rate mortgage holders.

Bank of Ireland and Permanent TSB says they are both passing on the interest rate cut in full to owner occupiers with variable or tracker rate mortgages.

We will update the site as more news from other lenders is received.