Mortgage interest rate unchanged

Mortgage interest rates payable by consumers remained largely unchanged in May, but are still lower than the eurozone average, according to the Central Bank.

According to the financial watchdog’s May retail interest rate stats, published yesterday, average rates on outstanding loans to households for house purchases amounted to 2.98% as of the end of the month.

This covered outstanding mortgage loans with an original maturity over five years, which accounted for 99% of all outstanding mortgages in the Irish market.

The rate is virtually unchanged from April’s levels, but technicallyrepresents a two-basis- point (0.02%) decline and is down by 44 basis points (0.44%) on the average interest rate reported at the end of last September.

The corresponding average rate across the rest of the eurozone remains higher at 3.77%, having fallen just 0.14% over the past eight months.

“Developments in average outstanding mortgage interest rates in Ireland have broadly reflected the changes to the ECB main refinancing rate in recent years, due to the high proportion of tracker and other variable rate mortgage products,” the Central Bank said.

However, The Irish Brokers’ Association has continually criticised the Central Bank over these figures,

It points out that while the average interest rate on Irish mortgages may be slightly lower than the eurozone average at present, mortgages here are more expensive.

Chief executive Ciaran Phelan said: “The missing factor in this data is that, as a result of the property boom, Irish mortgage holders have far bigger mortgages than their European counterparts.

“It would be more relevant to contrast the average mortgage repayment in Ireland with that of the eurozone.

“If that was done, it would surely show that the Irish are paying far more for their home that those in other European countries.”

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