Irish tracker mortgage holders look set to get a bonus reduction of 0.35 of a percentage point in the interest rate on their loans this autumn, due to a rethink by the European Central Bank of the gap between its different policy rates. Photograph: iStock
However, tracker mortgage rates are priced off another ECB interest rate, the refinancing rate, which has recently been half a point higher and now stands at 4.5 per cent. This means that currently, the interest rates on tracker loans are typically in the 5.6 per cent to 6 per cent range. There are 180,000 tracker mortgage holders in the State.
Economist Simon Barry says that the ECB is not breaking new ground by varying the gap between its various interest rates, as it has done so in the past as economic conditions have varied.