ONE OF the largest mortgage lenders in the State, the Ulster Bank Group, has decided not to pass on the reduction in interest rates announced by the European Central Bank (ECB) this week.
On Thursday, the ECB cut its main interest rate by 25 basis points to a new low of 1.25 per cent.
This will result in monthly repayments on many typical mortgages falling by €25 to €65.
Banks are obliged to pass on rate reductions to holders of a tracker mortgage, but have discretion with regards to variable rate mortgage customers. Ulster Bank, with its subsidiary First Active, is the second largest mortgage lender in the State with about a 20 per cent market share.
In a statement yesterday, Ulster Bank said it had decided not to pass on the rate reduction to standard variable rate mortgage holders “in consideration of the needs of savers as well as borrowers”.
The bank said its savings rates for personal customers would also remain unchanged.
In March, when the ECB reduced interest rates from 2 per cent to 1.5 per cent, Ulster Bank only passed on half, or 25 basis points, of the reduction to variable rate mortgage holders.
Following that rate reduction Ulster Bank and First Active also reduced their deposit rates offered to lenders by 0.50 basis points.
The only other lender in Ireland that has yet to announce whether it will pass on the mortgage rate interest reduction is KBC Bank Ireland.
All other lenders have said they will pass on the reduction in full to all owner-occupiers, with Halifax and Bank of Scotland (Ireland) extending this to all holders of a variable rate mortgage, including loans for buy-to-let and holiday homes.
