The most expensive Irish mortgage rates in the euro area again

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Ireland has reclaimed the position of having the highest mortgage rates in the eurozone, according to the latest central bank data.

The weighted average interest rate on Irish new mortgage deals in July was 2.73%, down 9 basis points from July 2020, but more than double the euro area average of 1.28 %.

According to the Banking and Payments Federation Ireland, the average mortgage loan for a first-time buyer is around € 250,000. This means that someone who borrows this amount over 30 years pays more than an additional € 181 per month, or almost € 2,200 per year compared to their European neighbors.

Brokers Ireland said Ireland is back at the “top of the euro zone league” but there has been “continued marginal improvement in the rate, reflecting greater competition in the Irish market”.

Brokers Ireland chief financial officer Rachel McGovern said the 29% year-over-year increase in the volume of new mortgage deals in July reflected pent-up demand for mortgages.

“If you can be successful at getting a mortgage, it makes a lot more sense financially than renting,” she said.

“In all areas except the two most expensive to buy property in Dublin, it is cheaper to pay off a mortgage than to pay rent, which is noticeably the case in very many parts of the country.

“Second, increased competition in the mortgage market with the entry of non-bank lenders Avant Money and Finance Ireland is leading for the first time ever to better and more secure mortgage products, in particular genuinely fixed long-term interest rates. . “

Daragh Cassidy, spokesperson for comparison and change site Bonkers.ie, said the drop in mortgage rates over the past year “is obviously welcome and the overall trend appears to be down, although very, very slowly “.

“However, it is still deeply frustrating that the rates here remain so high compared to those of our eurozone neighbors and have been doing so for so long,” he said.

“Despite the impending exits of Ulster Bank and KBC, there has been good competition in the mortgage market in recent months with ICS Mortgages, EBS, Finance Ireland and Avant Money, all cutting rates.

“However, this is not reflected in the average rate charged to consumers at this time.

“In addition, AIB, Bank of Ireland and PTSB, which together hold around 70% of the mortgage market, charge the highest rates. “

Data from the Central Bank shows that the weighted average interest rate on new fixed-rate mortgage deals was 2.62% in July, down 5 basis points from July 2020. Interest rate mortgages landlines accounted for 83% of new agreements during the month.

For new variable rate mortgage contracts, the weighted average interest rate was 3.29%. This is a decrease of 15 basis points from July 2020.

The volume of new mortgage contracts amounted to € 718 million in July. This was a 29% increase from July 2020, when volumes declined significantly after the onset of Covid-19.

It also represents an increase of 5% compared to June 2021. Renegotiated mortgages amounted to 324 million euros in July, an increase of 29% compared to the previous year.

The high volume of renegotiated mortgages in July is explained by a large volume of term contracts expiring and subsequent renegotiations with a reporting institution. The weighted average interest rate for all renegotiated mortgages was 2.61% in July.

New consumer credit agreements amounted to 195 million euros in July, down 4% from July 2020. The average interest rate on consumer loans was 6.69% , while the equivalent rate for the euro area was 5.25%.


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