The debt that reprices in October
About 100,000 tracker mortgages move with the European Central Bank (ECB) rate. The main rate rose from 2.4 per cent to 2.65 per cent, the second increase of 0.25 point this year. On a 100,000 euro balance the monthly payment rises by 26 euros, and the annual bill is 312 euros higher than in May. The change takes effect in October.[1]
The load builds where the next instalment is tied to the ECB rate. A fixed-rate loan does not take the same October step on the same day. A new fixed offer and a fix already in force are separate maturities.[1]
A wholesale shock that passes through only in part
Diesel is about 2.15 euros a litre, compared with about 1.70 euro at the end of February, a gap of about 45 cent a litre. The Central Statistics Office published wholesale electricity prices 77 per cent higher in August than a year earlier. Since March, retail electricity and gas tariffs have risen by roughly 8 per cent to 11 per cent.[1]
The retail tariff rise of 8 per cent to 11 per cent sits below the 77 per cent jump in wholesale electricity. That gap shows the full shock has not reached the annual bill. RTÉ's example household of 2,141 euros adds diesel, heating oil, energy and one tracker mortgage. A home without oil heat or without that mortgage carries a smaller slice of the total.[1]