ECB Cuts Base Rate to 0.25%

If rates go negative, say even as far as -0.75% would someone on a ECB+0.5% end up actually earning interest on their mortgage!
 
You will only benefit down to the zero point. The other part is bank margin which has nothing to do with ECB rate
 
manninp2 said:
If rates go negative, say even as far as -0.75% would someone on a ECB+0.5% end up actually earning interest on their mortgage!
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In the UK, there were some negative rate tracker margins of -0.60%.

The Bank of England rate dropped their base rate to 0.50%. Meaning, that the tracker mortgage rate was in theory -0.10%.

The banks took the view that a mortgage product was always a product where the customer paid interest to the bank and not the other way around. They refused to drop the interest rate below zero. In fact, one bank refused to drop it below 0.00001% because their system could not handle a zero rate. As far as I know, there were no legal challanges to the banks view.

The lowest tracker margin in Ireland was +0.40%, so the base ECB rate would need to drop to -0.50% before the issue would occur here. Seems unlikely. A lot of people are predicting a zero ECB base rate, very few are predicting a negative ECB base rate. Although, a negative ECB deposit rate remains a possibility.
 

A negative tracker margin, in the UK? I don't doubt you, I'm just surprised.

I thought the NIB LTV tracker at 0.5% margin was the lowest in RoI?
 
I frequent the UK boards (being paid in Northern Ireland) and I do read about various people on negative trackers occasionally.

As per the above poster, the lowest tracker I ever remember in the Republic of Ireland was 0.5% above base (I think it was either 50% or 60% LTV).
 
Hi all.
I can confirm that Nib were offering trackers 0.5 above ecb base rate if ltv was below 50percent.
 
Anyone on a AIB SVR would do well to assume that there will be a rise to 5% in the nearish future, in my opinion. How that will impact on arrears figures remains to be seen, but I doubt the banks will consider it necessary to leave the SVR alone to avoid making arrears worse. They will offer term extensions and other solutions to string borrowers along, no doubt.

If I recall correctly it was Spring this year when they raised their SVR. I'd expect they'll wait until at least Spring 2014 before raising it again. This is all just idle speculation from me.

I can't find the source or links now, but I'm pretty sure getting SVRs back around the 5% mark at least is an unofficial, if not stated, aim of the banks for the near future.
 
Incidentally, has anyone been advised by their bank yet as to what their revised monthly repayments will now be? I've heard nothing from UB. The cut comes into effect from tomorrow.
 
Opinions seemed divided this month whether rates would drop further or not but, alas, they're remaining at 0.25%.
 
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