INTEREST rates have been cut again for the sixth time in a row – as money experts urge savers to take action.
The European Central Bank (ECB) has slashed interest rates by a quarter of a percentage point for the second time this year and the sixth time since last June.
ICS Mortgages announced reductions to their variable rate mortgage products, effective from May 1.
Chief Commercial Officer at ICS Mortgages, Ray McMahon, said: “At ICS Mortgages, we remain committed to supporting our customers by ensuring they benefit from lower borrowing costs as market conditions evolve”.
Head of Communications at Bonkers.ie, Daragh Cassidy, said the rate cut was almost a forgone conclusion and will be welcomed by those on trackers in particular.
He said: “Those on variable rates, especially with the non-bank lenders like Finance Ireland and ICS Mortgages, should also see their rates fall.
“Also benefiting will be the thousands of so-called mortgage prisoners whose loans were sold to vulture funds, some of whom are still paying extortionate variable rates as high as 6 per cent or 7 per cent right now.
“After six cuts in a row, looking forward, the future path for interest rates now looks a bit less clear.”
The finance pro said there will be some more cuts by the end of 2025.
Mr Cassidy continued: “I think the ECB might pause its rate cutting cycle in April.
“But we’re still almost guaranteed another one or two cuts before the end of the year, which could take the ECB’s main policy rate down to 2 per cent – half what it was as recently as last June.
“But it’s not all good news. There are losers to falling interest rates as well. Savers will see their rates fall further, for example.
“Already since the start of the year AIB, Bank of Ireland, Bunq and N26 have all cut their savings and deposit rates. And more cuts are likely after today.
“Irish households currently have around €160 billion resting on deposit.
“But the majority of the money is still in accounts that pay little to no interest.”
He urged people with savings to lock into the higher rates “while they’re still available”.
Mr Cassidy added: “There is also a fear that lower rates will overheat the Irish economy.
“Our economy is performing much better than the rest of the Eurozone, as Wednesday’s bumper tax receipts show, and arguably doesn’t need lower interest rates. At least not right now.
“So this could lead to an uptick in inflation. Cheaper borrowing costs are also likely to add further fuel to an already overheating property market, which is really the last thing that we need.”
