ECB Rate Reductions Going In The Right Direction For Most Borrowers – Brokers Ireland

Press Release

Thursday 17^th April 2025

BROKERS IRELAND CALLS FOR AN INITIATIVE TO HELP THOSE ON EXCESSIVE RATES WITH CREDIT SERVICING FIRMS

Responding to today’s ECB decision to cut its main refinancing interest rate by a further 0.25%, Brokers Ireland said the move, the seventh reduction, will immediately benefit tracker mortgage holders and likely create a better environment for other borrowers who will be dependent upon the decisions of their lenders but savers 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, now 2.40%, with an outstanding mortgage of €180,000 will see a total reduction of €208 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, however, some borrowers are still “suffering from the outworking of the financial crash.”

“Recent research by the Oireachtas library found that about seven thousand mortgage holders are paying interest rates of 8.5% and above, with little option to switch,” she said and called for some initiative by policymakers to address this “deeply unfair situation.”

She said the situation is “particularly egregious” since these borrowers had received assurances when their mortgages were transferred to the credit servicing firms now controlling them that they would enjoy similar terms to those they had with the original lender.

In relation to savers she said there needs to be more incentives for savers to move from very low yielding savings accounts to options that deliver better returns. And she pointed to a recent Central Bank publication showing Irish households’ preference for shorter-term, more accessible deposit account types relative to the average in the euro area, and this has cost them almost €800 million in unearned interest in 2024 alone.

Ms McGovern again called for the urgent implementation of the recommendations of the Funds Sector Review by the Department of Finance.

“This report recognised the reality that there are massive tax disincentives that discourage people from opting into better value savings products,” she said.

And she said beyond tracker mortgage holders 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.

“The falling interest rates we’re seeing combined with more competition coming into the market is positive for them. The fears they had a year ago about coming out into a much higher interest rate environment will now have eased somewhat,” she said.

“We would advise mortgage holders to take professional advice, there are substantial savings to be gained,” she concluded.

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