Irish mortgage rates remain second highest in Europe

The weighted average interest rate on new Irish mortgage agreements was 2.76% in December 2020, more than double the EU average.

The latest figures from the Central Bank show Irish mortgage interest rates are still far higher than the EU average.

The weighted average interest rate on new Irish mortgage agreements was 2.76% in December 2020, making it the second-highest in Europe, just behind Greece.

The average for the euro area stood at 1.29% in December.

The weighted average interest rate on new fixed rate mortgage agreements in Ireland remained unchanged at 2.67% in December, with fixed rate mortgages accounting for over 80% of new agreements over the month.

The volume of new mortgage agreements amounted to €955 million in December, the highest monthly volume since the series began.

This represents an increase of 15% on the same period last year, and a 16% increase on November 2020.

The Central Bank noted that the high levels of agreements in December is in contrast to the low levels of activity seen over the Summer months.

The volume of new mortgage agreements for June, July and August 2020 was 35% lower than the corresponding period in 2019.

Interest rates on new household term deposits remained at 0.02% in December. This compared to the euro area rate of 0.22%.

Trevor Grant, Chairperson, Association of Irish Mortgage Advisors (AIMA) said the figures throws light on “just how much borrowers may be overpaying.”

“Many mortgage holders are paying rates in excess of 3.5% when they could be paying anywhere from 1.95% - 2.35% and saving thousands in monthly repayments and interest over the remaining term of their mortgage.” 

While Mr Grant said lenders themselves have to take steps to bring costs down for their customers, mortgage holders also have control over what they pay.

“Our message is a constant and simple one – review your mortgage terms every 2/3 years and take market-based advice from a specialist market advisor, who will shop the market for you and identify the best options available – rather than simply going direct to a Lender, that is not obliged to tell you if a better rate and terms can be obtained elsewhere.”