ECB Rate Reductions Good For Mortgage Holders But Not For Savers – Brokers Ireland

Press Release

Thursday 6^th March 2025

Responding to today’s ECB decision to cut its main refinancing interest rate by a further 0.25%, Brokers Ireland said the move, the sixth reduction, will be welcomed by tracker mortgage holders in particular but not so for savers who could see some pulling back on already very poor savings rates.

Today’s 0.25% drop, would mean a typical tracker mortgage holder on 0.5% above the ECB rate with an outstanding mortgage of €180,000 will see a total reduction of €167 per month on repayments arising from the reductions, including the special one-off reduction of 0.35% in September last.

Rachel McGovern, Deputy Chief Executive at Brokers Ireland said: “Tracker mortgage holders will now be down to 2.65% from the very high point of 4.5% in September 2023. This includes the 0.35% reduction. Tracker mortgage holders, depending on their individual contracts, pay an additional 0.50% to 1.25% on the ECB rate.

“Given increased global uncertainty it’s very difficult to predict where we’ll be in a year’s time,” she said. “That said the wider European economy has seen very weak growth to which the normal response should be stimulation by way of lower interest rates. However, it’s very unlikely we’ll see zero rates in the short term as we did in the period prior to July 2022.”

Ms McGovern said beyond tracker mortgage holders those on variable rates and those coming off fixed rates are dependent upon what their lenders will do.

About eight in every ten new mortgages taken out in recent years were for fixed terms, short fixed terms, typically three years. And about 80,000 of these are exiting those rates this year.

“With falling rates and a bit more competition in the market their worst fears will have eased,” she said.

“We would advise mortgage holders to take professional advice, there are substantial savings to be got.

“With property prices rising many will find themselves with a better loan-to-value ratio which could deliver a lower interest rate.” She said this underpins the benefit of home owners regularly reviewing their mortgages to assess potential for savings.

And she said lenders have the capacity to offer better long-term fixed interest rates, which were only relatively new in the market when they were pulled as the ECB began raising rates from mid-2022.

Ends

Note: Brokers Ireland operates the ‘Future Financial Experts’ Transition Year programme aimed at communicating good financial skills to students and creating awareness around financial concepts.

Further information:

Rachel McGovern,    Deputy Chief Executive, Brokers Ireland

Tel. 086-8259938

Mairéad Foley, Foley Ryan Communications

Tel. 086-2556764