Another mortgage rate cut on the cards

Another mortgage rate cut on the cards

Mortgage holders are expected to receive a pre-Christmas boost later this week when a rate cut of 0.25pc, and possibly as high as 0.5pc, is announced.

The European Central Bank (ECB) is expected to cut its key interest rates for the second time in two months as the EU debt crisis threatens to spiral out of control.

While speculation has grown in recent days that the reduction could be as high as half a percent, it is considered more likely to be 0.25pc – the same rate of cut as the one announced in early November.

However, even if it is just a quarter-point cut, struggling mortgage payers are unlikely to have to wait very long for further reductions.

A drop of 0.25pc on Thursday will mean repayments would fall by €45 a month for a €300,000 mortgage.

If the higher cut was to be implemented, monthly installments would plummet by €90 for the same amount of borrowings.

However, the reductions will only affect those on tracker mortgages, with property owners again left sweating about whether or not the various financial institutions will pass on the cuts to them. Bank of Ireland and Ulster Bank were among the high-profile lenders not to have passed on the last rate cut to their variable customers.

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