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With the economy in Ireland experiencing deflation for the first time in 50 years during January as a result of falling interest rates, this could be the ideal time for homeowners to reduce any of their outstanding loans.
Mortgage holders saw repayments drop by an average of €50 to €150 a month thanks to the European Central Bank’s half-point cut in rates to 2.5 per cent in December, with a further 0.5 per cent cut in January.
This sharp fall in mortgage costs, which declined by around 15 per cent in the three months before January, accounted for two-thirds of the inflation drop experienced in the Irish economic market.
This also helped to cut the price of goods and services, which in turn helped to reduce the cost of living for many people. This claim has been backed up by the Central Statistics Office (CSO) who saw a fall off 1.7 per cent in the Consumer Price Index for January, helping to drag annual inflation down from 1.1 per cent in December to -0.1 per cent for this first month of this year. This is a level not seen since the second quarter of 1960.
So householders are enjoying declining mortgage cost burdens and are seeing a marginal increase in their purchasing power. However, with interest rates expected to remain low for at least the next twelve months, homeowners should be encouraged to use the money they are saving on their reduced mortgage repayments, to pay off any other outstanding debts whilst they have the chance.
This could be the ideal time to make real in roads into your loans, so when the financial picture finally begins to brighten, you are in a fantastic position to enjoy the good times again. As rates have dropped, so will repayments, meaning that you can start to pay off high interest rate loans much quicker than you could a year ago.
This is a good time to make those changes and reduce your debts!
Use our Free Debt Buster now to see how much quicker you can clear those loans.
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