Irish mortgage rates well above Eurozone average
The weighted average interest rate on new fixed-rate mortgage agreements, which make up 82% of all new agreements, was 2.59% in April. Picture: Colin Keegan, Collins Dublin
Ireland's mortgage rates are the second-highest in the eurozone after Greece, revealed statistics released by the Central Bank today.
The weighted average interest rate on new Irish mortgages was 2.77%, compared to the Eurozone average of 1.59%.
The weighted average interest rate on new fixed-rate mortgage agreements, which make up 82% of all new agreements, was 2.59% in April. This marks a decline of 4 basis points from April 2021 and a 1 basis point fall from March 2022.
In comparison, for new variable rate mortgage agreements, the weighted average interest rate fell to 3.55% in April. The rising use of fixed-rate mortgages in recent years has led to higher levels of volatility in the variable rate mortgage category.
Interest rates vary widely in other Eurozone countries as Finland continues to have the lowest average mortgage rate in the Eurozone at just 0.95%, followed by Portugal at 1.07%.
The Eurozone average is 1.59%, reaching its highest level in nearly three years and marking an increase from 1.46% in March, and 1.26% in April of last year.
In contrast, Irish mortgage rates fell by 3 basis points from April 2021.
Daragh Cassidy, Head of Communications at bonkers.ie says: “These figures show the peculiarities of the Irish mortgage market. Rates here have been wildly out of kilter with the rest of the Eurozone for years. That continues - but this time it’s more positive. As rates have been increasing significantly in some countries over the past few months they’ve largely been static here.
“However with inflation in the Eurozone at a provisional 8.1% in May, it's over four times the ECB’s target. The US, UK, Australian and New Zealand central banks have all raised rates recently to help rein in rapidly increasing prices, and it’s only a matter of weeks before the ECB feels compelled to follow suit. And this will lead to higher mortgage rates here," he added.
Overall, in April 2022, the total volume of new mortgage agreements in Ireland amounted to €605m. This represents an increase of 9% on April 2021 and 9% fall from the previous month.
Trevor Grant, Chairperson, Association of Irish Mortgage Advisors (AIMA) said: “Fixed rates are the only game in town when it comes to mortgages in Ireland at the moment. We are seeing a steadily increasing number of movers/second-time buyers seeking mortgage approvals with long term flexible fixed-rate options attached.
"This follows the trend set by existing mortgage holders seeking to protect themselves against the imminent future interest rate increases."
