Home Truths

The ECB has been cutting interest rates a fair bit of late. This made big news before Christmas here in Ireland as it was hoped that this would leave people with more spending money due to lower mortgage and credit card repayments. But I’ve been getting letters from the bank with which I have a mortgage, after each rate cut, telling me that I whilst rates are being cut, I will continue to make the same monthly repayment, meaning that I will pay off the loan more quickly. No doubt this is financially prudent for them: I figure they need to get me off the books as quickly as possible. And to me it might also make sense: get shot of debilitating mortgage debt. Problem is that this policy on the part of the bank doesn’t make me more likely to spend money, which is what is needed to keep the economy afloat (not me personally, but consumers on the whole).

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