European Central Bank reduces rates by .25%
The Ecb has reduced rates by .25%.It is expected that a further 1/2% drop may be on the cards over the next six months.
The interest rate drop is good news for tracker rate mortgage holders.
It is also good news for variable rate mortgage holders provided their lenders are willing to pass on the rate reduction.The Central Bank is pressing all lenders to pass on the rate reduction.
PTSB and KBC will pass on the rate reduction.
PTSB had driven their rates up to close to 6% when others are still around 3.5% and it is therefore no big deal for them to drop rates.They remain extremely expensive and with most mortgage holders looking at huge drops in their home values it is very difficult to qualify for a switch.
In order to qualify for a switch one of the basic conditions is that the loan to value must be 80% or less.
It is unlikely that AIB and Bank of Ireland will pass on the rate reduction.
Today's announcement comes on the back of worrying demand figures over Europe and concerns about the Euro area slipping into recession.
The European slowdown is bad news for a country like Ireland which is so dependent on exports.
Hopefully the move will add impetus to growth prospects and this along with the recent Eurozone agreement will stimulate the area.