Interest rates on course to hit record low next month

Interest rates on course to hit record low next month

Homeowners could have more than the New Year to celebrate in January if interest rates fall again

Mortgage holders can look forward to some New Year cheer with interest rates on course to hit an historic low next month as part of Europe’s battle to save the euro.

Following cuts of 0.25% last month and this week, another cut is expected in January as the ECB prepares to offer banks unlimited cash for three years in its drive to keep European lending institutions afloat.

The latest cut of 0.25% announced yesterday will benefit more than 400,000 on tracker mortgages before Christmas, with a saving of almost €40 a month on a €250,000 mortgage. A similar cut in January, as has been predicted by Dermot O’Leary of Goodbody Stockbrokers, will bring rates to the record low of 0.75%.

The move will not benefit everyone, however, with four banks refusing to pass on the latest cut to the variable mortgage customers and Bank of Ireland passing on just part of it.

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