Homeowners can save €1,920 a year on their mortgage with this expert’s advice.

The European Central Bank announced its eighth consecutive increase as its main lending rates were raised from 3.75 per cent to 4 per cent.

Joey Sheahan from MyMortgages.ie shared with RSVP Live how people can cut down their monthly payments.

He said: “If, as expected, the ECB raise their rates, it will be yet another blow to mortgage holders all over Ireland – particularly those on tracker rates.

“But rather than just accept their fate of higher mortgage repayments, we would urge all mortgage holders – particularly those on tracker or variable rates, to take action now, because there could well be a window in which they can secure a better rate.”

Joey explained that there has been a decrease in the amount of people switching their mortgages.

“The latest BPFI figures released just yesterday show a fall in switching volumes – albeit from a post-Covid high level in 2022,” he added.

“Mortgage holders must be encouraged to keep reviewing their options. Just because rates are going up doesn’t mean as a mortgage holder you cannot access cheaper rates.

“If we take the case of a tracker mortgage holder with €225,000 outstanding, and 15 years remaining, a 0.25% increase today could increase their rate to 5% (4% base rate plus 1% margin) which means they will pay €1,779 per month and total interest of €95,271.

“If they looked to switch, then we could in all likelihood secure a rate of 3.6%, which would see that mortgage holder repay €1,619 per month and total interest of €66,520.”

The European Central Bank’s increase will affect around 170,000 tracker mortgage holders.

This will result in an additional €26 a month to a €200,000 mortgage on a 1.25 per cent tracker rate.

President Christine Lagarde of the European Central Bank said: “The key ECB interest rates will be brought to levels sufficiently restrictive to achieve a timely return of inflationto the 2% medium-term target and will be kept at those levels for as long as necessary.”