Ireland sees largest monthly mortgage rates increase in five years

An average mortgage holder is paying almost €187 extra a month compared to our European neighbours

Irish housing costs such as rent, mortgage rates, gas and electricity are a staggering 78% above the European average.

Ireland continues to hold the second-highest mortgage rates in the eurozone, according to new figures from the Central Bank.

Ireland’s mortgage rate of 2.76%, which increased from 2.69% in December representing the biggest monthly increase in almost five years, is now more than double the eurozone average of 1.31%.

“Higher mortgage rates add hugely to the cost of living in Ireland, which as we know is already extremely high compared to the rest of Europe. According to Eurostat, Irish housing costs such as rent, mortgage rates, gas and electricity are a staggering 78% above the European average,” said head of communications with mortgage comparison website Bonkers Daragh Cassidy.

The average first-time buyer mortgage in Ireland is around €262,000. This means someone borrowing this amount over 30 years is paying almost €187 extra a month, or over €2,200 a year, compared to our European neighbours, according to the Banking and Payments Federation of Ireland (BPFI).

Meanwhile, rapidly rising inflation has led to suggestions that the ECB need to increase interest rates this year to help quench it. A recent estimate for inflation in the eurozone shows it running at 5.8% in February which is almost triple the ECB target of 2%. The current war between Russia and Ukraine has significantly clouded the forecast for a potential rate rise.