One in four hold fixed-rate mortgages

ONE in four homeowners hold fixed rate mortgages as they scramble to take advantage of record low interest rates.

The majority of mortgage holders have tracker products, where interest rates track those of the European Central Bank (ECB).

The Irish Banking Federation (IBF) says average mortgage costs in Ireland are still among most competitive in the EU.

The latest Central Bank figures for new mortgage lending show the share of fixed-rate mortgages grew in Q1 2010 to account for 26% of the market, with variable rate mortgages, including trackers, accounting for 74%. In Q4 2009 fixed rates accounted for 19.6% of the market.

The Central Bank estimates that as much as 60% of outstanding variable rate mortgages in Ireland are tracker products, according to the IBF.

The Professional Insurance Brokers Association (PIBA) says the difference between those on a €200,000 tracker and variable rate mortgages is around €160 per month. PIBA director of mortgage services Rachel Doyle said: “This yawning gap between mortgage holders is, unfortunately, set to worsen with non-ECB linked interest rates expected to rise by a further 0.5% by the end of the year.”