What are you doing with your ECB interest rate windfall?

Okay, so it’s only €30 for every €100,000 borrowed on your mortgage. The average mortgage, according to RTE news this evening is €250,000 so that’s a saving of €75 based on todays reduction.

But, added to the recent previous further ECB rate reduction, you’re now €150 per month better off. And potentially you’re even better off following the changes to the mortgage interest rate relief in the Budget.

Lots of numbers, but the question is – what are you going to do with that extra money?

How’s your “rainy day” savings looking? Or are you planning a big Christmas and going to need a bit extra? Do you need to pay down other debts – credit cards, car loans, etc? Or could you overpay on your mortgage to reduce the term?

Whatever you do, don’t let this welcome extra money to be assimilated into your day to day spending. This money should be seen as a bonus, and should be treated differently to your “normal money” – make sure you get a decent longer term benefit from it.

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4 Responses to What are you doing with your ECB interest rate windfall?

  1. Donal November 7, 2008 at 09:43 #

    Would it not be more prudent to keep paying this each month into your mortgage? Doesn’t any extra payment come directly off the principal?

  2. Eoin November 7, 2008 at 10:33 #

    I’ll be paying it straight back into the hands of an incompetent government through increased VAT and a regressive 1% income tax hike.

  3. Colm November 7, 2008 at 13:06 #

    What reduction?

    ECB reduce rate to rescue economy.

    Banks delay passing it on for 30 days.

    ECB scratch head in confusion on why last month’s rate has not boosted the economy and cut rates again.

    Repeat cycle.

    The ECB should grow a pair, cut the rate by 1.5% like the UKCB did, and call in the banks and tell them the new realities of life. Pass on rate cuts immediately or we cut you out of any bail out plan and let you go bust.

    But then again Trichet’s only consistant policy is to do nothing and hope someone else fixes the problem. That way he can’t be accused of doing anything wrong.

  4. Mark November 7, 2008 at 14:48 #

    In fairness Colm, if the ECB had dropped 1.5% yesterday as well, following 0.5% last month, there’s a good chance that people would be shouting and moaning that the ECB didn’t know what they were doing in that scenario as well.

    You’re right though – what reduction? I haven’t seen my reduction yet from Ulster Bank.

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