Chapter 3 of 10 · Rates, lenders and switching · 2 of 10
ECB rate changes: what they mean for your mortgage
Checked 21 Oct 2026the Central Bank's mortgage measures, Revenue's rules and the scheme operators' published terms.
How ECB decisions reach Irish mortgages: trackers move at once, variables follow lenders, fixed rates price ahead. With the 2026 rises.
Written in plain English for the person buying, selling or switching. This guide covers the Republic of Ireland only.
The European Central Bank sets interest rates for every country that uses the euro, including Ireland. When it changes its rates, the change reaches Irish mortgages in three different ways, at three different speeds. This guide explains the mechanism. It does not predict the next move, because nobody can.
What the ECB is and what it sets
The European Central Bank (the ECB) is the central bank for the euro. Its job is to keep prices stable across the euro area. Its main tool is the interest rate it charges and pays the ordinary banks. See the glossary for the terms used here.
The rate most often reported is the deposit rate. That is what the ECB pays banks for money left with it overnight. The ECB also sets a main lending rate, which moves at the same time by the same amount. Irish trackers follow that lending rate.
The ECB's Governing Council meets about eight times a year to decide. A change takes effect a few days later.
The 2025 and 2026 changes
These are the deposit rate changes recorded in our rules config, read from the ECB's page on 21 October 2026.
| Date the rate took effect | Deposit rate | Change |
|---|---|---|
| 11 June 2025 | 2.00% | After a run of cuts |
| 17 June 2026 | 2.25% | Up 0.25 of a point |
| 16 September 2026 | 2.50% | Up 0.25 of a point |
So the ECB raised its rates twice in 2026, by a quarter of a percentage point each time. The deposit rate at 21 October 2026 is 2.50%. The ECB's page carries the full history. We log each change on our changes page.
Three kinds of mortgage, three speeds
An ECB change reaches an Irish mortgage in one of three ways. Which one applies to you depends on the kind of rate you have.
| Kind of rate | How it reacts to an ECB change | How fast |
|---|---|---|
| Tracker | Moves by exactly the same amount, by contract | Within days |
| Standard variable | Moves if and when the lender decides | Weeks to months, or not at all |
| Fixed | Does not move during the fixed period | Only when you next fix |
Trackers move at once
A tracker mortgage charges the ECB rate plus a fixed margin, say 1%. If the ECB raises its rate by 0.25 of a point, your rate goes up by 0.25 of a point. The lender has no choice, and neither do you. The same happens on the way down.
Our tracker guide explains why most people keep theirs.
Variable rates follow the lender
A standard variable rate is set by the lender. The lender's own cost of borrowing rises after an ECB rise, so lenders often pass some or all of it on. But they choose the amount and the date. They can also hold the rate, or move it when the ECB has done nothing.
In August 2026 the average variable rate on new Irish mortgages was 4.16%, according to the Central Bank.
Fixed rates price ahead
A fixed rate does not change during its period. An ECB change makes no difference to your payment until the period ends.
Fixed rates for new loans are a different matter. Lenders set them from the cost of borrowing money for the same number of years. That cost reflects what the markets expect the ECB to do over that period. So fixed rates often move before an ECB decision, not after it. In August 2026 the average new fixed rate was 3.49%.
A worked example: a 0.25 point rise on a tracker
Say you have €200,000 left on a tracker with 15 years to run. Your rate is 3.50%. The ECB raises rates by 0.25 of a point, and your rate becomes 3.75%.
| At 3.50% | At 3.75% | |
|---|---|---|
| Monthly payment | €1,430 | €1,455 |
| Change | About €25 a month more |
The same rise on a €300,000 loan over 30 years adds about €42 a month. Put your own balance, rate and remaining term into the repayment calculator to see your figure.
What to do if you are on a variable rate
An ECB rise does not change your rate on the day. Watch for a letter from your lender. It must tell you in writing before a variable rate changes, with the new payment and the date.
Each letter is a chance to compare. Since 24 March 2026, under the Consumer Protection Code 2025, your lender must tell you what you could save by moving to a lower rate it offers. Our switching guide sets out the steps if you decide to move.
What to do if you are on a fixed rate
Nothing changes until your period ends. The useful thing to know is the end date. Put it into our fixed rate reminder and you get an email 90 days and 30 days before, with a checklist.
When the period ends, the rates on offer reflect the ECB's position at that time, not the position when you first fixed. Our guide on a fixed rate ending covers the three options at that point.
What the ECB does not control
The ECB rate is one input. Irish mortgage rates also depend on:
- What each lender pays for its own funding, which includes deposits from savers.
- Competition between lenders for new borrowers.
- The cost to lenders of loans that go wrong, and the capital rules they work under.
- The lender's own targets for its share of the market.
That is why Irish rates and the ECB rate do not move in step. In August 2026 the average new Irish mortgage rate was 3.53%, against a euro area average of 3.62%. Our guide on mortgage rates in 2026 looks at those figures.
The mortgage interest tax credit
Rate rises between 2022 and 2024 led to a temporary tax credit. It is worth 20% of the increase in interest you paid compared with 2022, up to €625 a year. It runs for the tax years 2023 to 2026. Budget 2027 did not extend it, so 2026 is the final year. Revenue's page explains how to claim.
Where this leaves you
Find out which kind of rate you have, from your loan offer or your lender's app. Then use the repayment calculator to see what a quarter-point change would do to your payment. If the answer worries you, the switching journey sets out how to compare rates and move.
Questions people ask
What is the ECB rate now?
The ECB deposit rate is 2.50%, set on 16 September 2026. It was 2.25% from 17 June 2026 and 2.00% from 11 June 2025. The ECB's own page lists every change.
Does an ECB rate rise affect my fixed mortgage?
Not during the fixed period. Your rate and payment stay the same until the period ends. It can affect the rates on offer when you come to fix again.
How soon does a tracker mortgage change after an ECB decision?
A tracker follows the ECB rate by contract, so it moves by the same amount, usually within days of the ECB's change taking effect. Your lender writes to confirm the new payment.
Do variable rates have to follow the ECB?
No. A standard variable rate is set by the lender. Lenders often move it after an ECB change, but they decide the size and the timing, and they can leave it alone.
When does the ECB decide on rates?
The ECB's Governing Council meets about eight times a year to set rates. The dates are published in advance on the ECB's website.