The head of the European Central Bank (ECB) says the new and lower interest rate will remain for some time and may be cut even further.

The ECB has cut its key interest rate in an unexpected move to a new historic low of 0.25%. The move will benefit those on tracker mortgages.

It means the holders of tracker mortgages will see their repayments fall from next month by around €40 a month.

It is estimated that some 400,000 tracker mortgage customers in Ireland will benefit.

The rate was last reduced back in May.

The decision was made by the ECB governing council at its monthly meeting in Frankfurt, Germany.

ECB President Mario Draghi says low rates are here to stay.

Brendan Keenan of the Irish Independent told Lunchtime here on Newstalk this was a surprise move.

And Newstalk's Business Editor Ian Guider says this may not mean a reduction for variable rate customers.

Watch the ECB President Mario Draghi explain his decision below: