Ecb reduces rates.25%

03 April 2009
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The European Central Bank today lowered its main lending rate to an all-time low of 1.25%.

The ECB has now cut its benchmark rate six times from 4.25% since last October as the euro zone economy has gone from bad to worse.

Annual inflation hit a record low of 0.6% in March and is expected to fall further.

Halifax, Bank of Scotland (Ireland), Permanent TSB, EBS and Irish Nationwide have said they will pass on the full 0.25% ECB rate cut announced today to all its variable and tracker rate mortgage borrowers.

AIB has said it will pass on the ECB rate reduction in full to owner-occupier mortgage customers, as have Bank of Ireland and ICS Building Society.

Ulster Bank and First Active have announced they will not be passing on the reduction to variable rate holders.Their excuse is that they want to maintain savings rates which is an interesting stance.The reality is that this Bank grew its book on the back of extremely low cost tracker mortgages and need to find ways to balance their margin in these difficult times.

Fixed rates are now looking attractive and borrowers should seriously consider locking into a cheap fixed rate.Unfortunately not all lenders are providing competitive fixed rates and borrowers should seek our advice in this area.