Why is my mortgage rate not divisible by 0.25%?

[ronaldo]

I was just reviewing my Pepper online account, where my old National Irish Bank tracker is held, and found it strange that the current interest rate isn't divisible by 0.25%.

I see that they've now applied this closing of the gap between the deposit facility and the fixed rate tender so many trackers, including my own, had their rate drop by 0.6% last month versus the 0.25% many would have seen on the headlines.

 

[ClubMan]

I was just reviewing my Pepper online account, where my old National Irish Bank tracker is held, and found it strange that the current interest rate isn't divisible by 0.25%.

Why do you think that it should be?
The current ECB rate of 3.65% isn't evenly divisible by 0.25.
What's your tracker margin?

 

[ronaldo]

Why do you think that it should be?
The current ECB rate of 3.65% isn't evenly divisible by 0.25.
What's your tracker margin?

0.5% is the tracker margin and I was aware of the deposit rate but not the fixed rate tender used by the ECB.

Many will be surprised to see their mortgage drop by 0.6% as opposed to 0.25%. Some will notice immediately whilst some may see the headline deposit rate drop by 0.25% again in the next 1-2 months and wonder why their mortgage repayments didn't drop by as much as they will this month.

 

[peemac]

0.5% is the tracker margin and I was aware of the deposit rate but not the fixed rate tender used by the ECB.

Many will be surprised to see their mortgage drop by 0.6% as opposed to 0.25%. Some will notice immediately whilst some may see the headline deposit rate drop by 0.25% again in the next 1-2 months and wonder why their mortgage repayments didn't drop by as much as they will this month.

It's been flagged here and in the newspapers and also the banks have explained it in their correspondence.

For the few that still don't know and who have a query, the answer will be found quickly

 

[ClubMan]

I still don't understand the premise of the original question.
Why would anybody assume that their loan interest rate would/should necessarily be evenly divisible by 0.25?
Even the relevant ECB rate hasn't always been evenly divisible by 0.25.

Official interest rates

The three official interest rates the ECB sets every six weeks as part of its monetary policy to steer the provision of liquidity to the banking sector.

www.ecb.europa.eu

And I doubt that all tracker margins were necessarily evenly divisible by 0.25.

 

[Brendan Burgess]

0.5% is the tracker margin

And that is divisible by 0.25%

But if the ECB rate is not divisible by 0.25%, then the full rate of ECB + 0.5% won't be divisible.

While the ECB rate was nearly always a multiple of 0.25%, it wasn't always



And now, with the 0.6% reduction, it isn't either.

Brendan

 

[RichInSpirit]

Wasn't there some technical or paper drop of the ECB margin at some point recently which was slightly different from the 0.25% drops?
Was it a 0.35% drop sometime in September?
As well as the 0.25% drop.
I think that's where the 0.6% drop came from.

 

[ClubMan]

Wasn't there some technical or paper drop of the ECB margin at some point recently which was slightly different from the 0.25% drops?
Was it a 0.35% drop sometime in September?
As well as the 0.25% drop.
I think that's where the 0.6% drop came from.

Key Post - Technical reduction in ECB rate coming into effect on 18th September

We are at the end of our fixed rate with PTSB. We got a letter in August and our options are: fix for 2 years for an extra €142 a month, for 3 years for an extra €66 per month or choose variable for an extra €122 per month. I rang PTSB to ask if in light of the ECB announcement would we get an...

www.askaboutmoney.com

 

[ronaldo]

I still don't understand the premise of the original question.
Why would anybody assume that their loan interest rate would/should necessarily be evenly divisible by 0.25?
Even the relevant ECB rate hasn't always been evenly divisible by 0.25.

Official interest rates

The three official interest rates the ECB sets every six weeks as part of its monetary policy to steer the provision of liquidity to the banking sector.

www.ecb.europa.eu

And I doubt that all tracker margins were necessarily evenly divisible by 0.25.

I said in a post 'I was just reviewing my Pepper online account, where my old National Irish Bank tracker is held, and found it strange that the current interest rate isn't divisible by 0.25%.'. That's the original post in this thread.

Basically, my margin is 0.5% and any time I've checked, which is rare, I've been accustomed to it being a number in increments of 0.25%. The fact that it wasn't led me to research further.

My post was split from the key post linked to above and the title was added making it look like the premise of my post was that I thought all tracker mortgages should be divisible by 0.25%.