ECB cut its key interest rate but Slovak mortgages won’t get cheaper

In line with expectations, the European Central Bank (ECB) cut its interest rates for the first time since September 2019, by 0.25 of a point to 4.25%. It wants to support the eurozone economy, especially Germany and France, after inflation fell to acceptable levels. The ECB's move will have an immediate impact on corporate loans linked to ECB rates, but will not yet bring a drop in Slovak mortgage rates. Banks have been expecting the cut for longer and it is factored into the rates already. Mortgages will become cheaper if risk premiums on government bonds fall. These in turn will fall if investors believe the government's promises to consolidate public finances.

(sme.sk)