ECB Changes V's Mortgage repayment date

Hi,

Something that has been on my mind since the last number of ECB Interest Rate drops (2024 & 2025)

I have a tracker mortgage with PTSB and when there has been a reduction from the ECB, it takes a very long time for this to translate to a reduction in my mortgage repayment.

e.g. There was a reduction in the rate on the 30th of January, My mortgage is due out on the 3rd of each month. Naturally, the payment due out on the 3rd of February will not be impacted however, in the last number of instances, PTSB send a letter very close to the next date and say the reduction will be for the following month.

Sorry if this is confusing, hopefully this hypothetical breakdown will make sense as it's been similar over the last few months

30th January 2025 - ECB announcement
3rd February 2025 - Payment Due - (I know that this will not be impacted)
(Hypothetical) 22nd February 2025 - Letter from PTSB with new mortgage rate and amount but also telling me that this will take affect on April 3rd 2025

Why does it not take affect on March 3rd?

Thanks

Username_Taken said:

30th January 2025 - ECB announcement

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The rate cut was announced on January 30th to take effect on/from February 5th.

The Governing Council today decided to lower the three key ECB interest rates by 25 basis points. Accordingly, the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will be decreased to 2.75%, 2.90% and 3.15% respectively, with effect from 5 February 2025.

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What does your mortgage loan agreement terms and conditions say about how and when your tracker rate changes with regard to ECB rate changes?

Thanks Clubman.

I'll have to have a look but as far as I recall, if there was a change, it was never passed on for the following month.

Excuse my naivety, but your screenshot above (with effect from 5th February 2025) that it should be passed on when my mortgage payment is due next (3rd March 2025),

Bear in mind that the effective date of a cut to interest rates does not have to coincide with the date of the monthly repayments.

Username_Taken said:

Excuse my naivety, but your screenshot above (with effect from 5th February 2025) that it should be passed on when my mortgage payment is due next (3rd March 2025),

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Sorry, I don't understand your point/comment/question.

You should check your mortgage loan agreement terms and conditions to see what they say about how and when ECB rate changes are passed on.

Or maybe someone else with a PTSB tracker can clarify?

Quick update,

I rang PTSB and asked about their policy and it seems like they only update their systems once per month. (Every 16 days). I asked if they knew if this was the same for all mortgage providers and they could not confirm.

So, when this change occurred on the 30th of January 2025, that change would take effect from 14th of February 2025 on PTSB's systems.

Although the change will be active from the 14th of February, they cannot guarantee that this ECB reduction will have an impact in my next payment (3rd March 2025).

This is the part I don't understand. The change will be in place on their side from the 14th but they still expect the old payment amount and not the reduced payment amount.

I have asked their data team to send me all details (ECB increases and decreases) for the last few years to see if this 16 day period has impacted and of my previous payments.

Did you check your mortgage agreement terms and conditions? What does it say about how and when ECB rate changes are passed on to you?

There is no downside to your payment being a bit higher for one month.

It'll help pay off the loan quicker!!!

What matters is the application of the changed interest rate.

Correct, the important thing is the interest effective date from an interest calculation, the repayment is a cashflow impact,

As letters have to be sent to customers, as far as I know advising of changes in repayment amounts, it would be reasonable to have some lead time, as what if it was an increase then would need to let customers know new repayment amount, and also depends on whether you pay early or late in the month.

@usernametaken, I too have a tracker mortgage with PTSB. The terms of such state they will apply all increases/decreases within one month from the date announced by the ECB as the effective date. Your annual mortgage statement will also list dates when the new rates were applied to your mortgage account. Decreases have averaged out at around 5/6 days from effective ecb rate change date, and increases between 7/10 days. I don't concern myself too much about the new repayment amount/date but rather when the new interest rate was applied. As said above, if for whatever reason the new repayment amount could not be applied in the following month, it will reduce the loan balance quicker.