Across the board cuts in interest rates will be limited but it is still worth examining your home loan options. Illustration: Paul Scott
The long downward path of European Central Bank (ECB) interest rates may be at an end. But what does this mean for borrowers? The bank left interest rates steady on Thursday for the third meeting in a row with the key deposit rate at 2 per cent. This follows eight reductions between September 2023 and June of this year, after a previous big hike in interest rates to deal with soaring inflation. This has fundamentally changed the market for mortgage borrowers. The proposed sale of PTSB could lead to welcome additional competition in the home loans sector.
Here are the five vital points you need to know if you are taking out a new mortgage, or refinancing an existing one.
1. The market is competitive, but there are still differences in rates: Some banks responded more quickly than others to the long downward move in interest rates. In some cases, they cut certain rates, but not others, for competitive reasons.
Up to recently, this had left significant gaps in the mortgage rates available to borrowers, particularly those who do not have homes with high energy ratings.
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