Ireland once again has highest mortgage rates in eurozone

ireland
Ireland Once Again Has Highest Mortgage Rates In Eurozone
The average interest rate on a new mortgage in Ireland is more than double the eurozone average. Photo: PA Images.
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Ireland once again has the highest mortgage rates in the eurozone, according to new data from the Central Bank of Ireland.

At 2.73 per cent, the average interest rate on a new mortgage in Ireland is the highest in the 19-country eurozone, and more than double the eurozone average of 1.28 per cent.

At the top of the league, Ireland is followed by Greece at 2.58 per cent and Latvia at 2.54 per cent. Finland meanwhile has the lowest average rate in the eurozone at just 0.71 per cent, closely followed by Portugal at 0.80 per cent.

Despite Ireland’s position at the top of the mortgage rates league, the country’s rate is down 0.09 per cent compared to last year, and at its lowest level since at least August 2017.

Daragh Cassidy, of comparison and switching website bonkers.ie, said the “overall trend does appear to be downward, albeit very, very slowly.”

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“However it’s still deeply frustrating that rates here remain so high compared to our eurozone neighbours and have done so for so long,” he continued.

“Despite the impending exits of both Ulster Bank and KBC, there has actually been some good competition in the mortgage market in recent months with ICS mortgages, EBS, Finance Ireland and Avant Money all reducing rates. However, this isn’t feeding through to the average rate consumers are being charged just yet.”

Highest rates

Mr Cassidy said larger lenders, in particular Allied Irish Banks, Bank of Ireland and Permanent TSB who hold around 70 per cent of the mortgage market between them, charge among the highest rates.

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He added that “many of the lowest rates in Ireland right now come with big caveats - such as a 40 per cent deposit - or are only available on B+ energy rated homes - something which is clearly beyond the capabilities of many first-time buyers.”

Mr Cassidy urged first-time buyers to do their research and shop around for mortgage lenders, and said those who already have a mortgage should consider switching.

“While there are costs associated with switching mortgage provider, in many cases banks will provide a sizeable cashback incentive to those who switch or a contribution towards the legal fees,” he said.

Irish banks must hold around three times the level of capital to safeguard against potential loan losses compared to banks in the rest of Europe. Banks say this is one of the main reasons why Irish mortgage rates remain so high.

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