Thursday, September 04 15:03:58
Tracker mortgage holders can save thousands of euro by sticking to their existing monthly payments, despite the latest interest rate cut, a leading mortgage servicing company has said.
David Kelly, MD of HML Ireland, said borrowers should consider taking advantage of this latest surprise move by the ECB to pay down debt.
"Rates have never been this low and therefore borrowers have an opportunity to pay down their loans faster and people who are in a position to do so, should take advantage of this," Mr Kelly said.
He was speaking after the ECB cut interest rates to a historic low of 0.05pc. This represents the central bank's eighth consecutive interest rate cut, which has seen rates fall from a high of 4.25pc in July 2008.
"Naturally when people see interest rates go down, they are tempted to use the savings for day-to-day expenses. However, we believe it makes a lot of financial sense to maintain or even increase payments and to make inroads into the principal sum," Mr Kelly said.
"While rates are now at historically low levels it's inevitable they will rise at some point. When they do, mortgage holders who have reduced their principal sum will be best placed to deal with the additional costs. It's a prudent course of action and could potentially save thousands of euro off your mortgage," Mr Kelly concluded.
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