Tracker mortgage holders could save around €400 a year after an ECB rate cut.
The European Central Bank has cut interest rates by 0.25 percentage points.
It is the first cut since 2019 and follows 10 interest rate hikes since July 2022.
Thursday's reduction was well flagged and several mortgage lenders have already cut their fixed rates over the past few weeks in advance of the move.
Tracker customers will see their rates fall automatically. Those on variable rates may have to wait a bit longer to see any reductions.
The European Central Bank building in Frankfurt, Germany, 21-7-13. Image: Manfred Gottschalk / AlamyDoddl.ie Managing Director Martina Hennessy told The Hard Shoulder it is really welcome news for around 180,000 tracker mortgage holders.
"Today's reduction will result in decreased repayments of just under €400 per annum for a tracker mortgage holder with an outstanding balance of around €250,000 over 15 years," she said.
"This same tracker mortgage holder will be waiting with bated breath as to what will happen for the rest of the year.
"Even with today's reduction this same tracker mortgage holder will still be repaying €6,500 more than they were before rates started increasing".
ECB rate cut for fixed rates
Ms Hennessy said those on fixed or variable rates may not see much change.
"Tracker mortgages are directly linked to the ECB rate and when there is a rate cut their rate will decrease within 30 days," she said.
"In the last six to eight weeks we've seen a lot of rate reductions, particularly on the fixed rate side, in anticipation of this rate cut.
"There will certainly be individual rate [cuts] and in the normal course of business banks variable rates and deposit rates should broadly increase or decrease as the ECB base rate moves.
"But the banks will also be noting that even though the ECB increased their rate by 4.75%, the banks didn't pass on all that increase".
'Meeting-by-meeting' decision
Banking & Payments Federation Ireland Chief Economist Ali Ugar told the show the ECB decesion was likely made as inflation "is getting under control."
However he believes a further rate cut at its next Governing Council meeting in July is unlikely.
"When you look at different commentators they were expecting three to four cuts by the end of the year," he said.
"But watching the press conference today they were very adamant that they're going to look at the data very carefully and [make] meeting-by-meeting decisions.
"So I think a rate cut in July is gone now".
Mr Ugar added that a "technical adjustment" will see a further reduction of 0.35% for tracker products in September.
