Mortgage holders must “feel the benefit” of interest rate cuts announced by the European Central Bank (ECB), Taoiseach Simon Harris has said.
He made the comments as the ECB announced on Thursday that it was reducing interest rates by a quarter of a percentage
Its key lending rate, which affects mortgage rates, will fall from 4.5% to 4.25%
It is the first decrease in several years and following 10 consecutive increases of 0.25% since 2022.
Irish customers on tracker mortgages will automatically see their rates decrease as they are linked to the European rate.
However, there are now questions about what it will mean for customers on variable rates. AIB, Bank of Ireland and EBS have all increased their rates within the last 12 months.
Following the announcement by the ECB, the Taoiseach stated that all mortgage customers must benefit.
“I welcome the decision by the European Central Bank to cut mortgage interest rates,” Mr Harris said.
“This is welcome relief to everyone on a tracker mortgage with tens of thousands of families set to see an immediate impact.
“Many households have experienced increases in their monthly mortgage repayments during a cost-of-living crisis.
“As we move into an era of interest rate reductions, we need mortgage holders to feel the benefit.
“I have written to the banks and will be meeting them shortly for a discussion on this.”
In a statement, a spokesperson for AIB said: “Customers with a tracker mortgage linked to the ECB rate will see reductions to their interest rate applied in line with their contract following the ECB rate decrease. We will write to these customers confirming the new interest rate and effective date. Customers can find the range of mortgage options we offer on our websites.”
They did not answer a question from the Irish Mirror about whether the cuts would lead to a decrease in variable mortgage rates.
A spokesman for Bank of Ireland stated that a 0.25% decrease for tracker customers would be implemented from June 18.
“The Bank continues to keep all other rates under ongoing review,” it added.
Finance Minister Michael McGrath said that banks should be “treating people fairly”.
“Where interest rates went up in line with the ECB changes, then they should fall as ECB interest rates come down,” he told RTÉ’s News at One.
“The important thing here is that there is consistency of treatment for both borrowers, but also for savers. And if the interest rates went up in line with ECB, then they now need to come down in line with ECB and that’s what we’ll be watching very closely.”
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