Average mortgage rate rises for first time since January

Irish mortgage rates are now seventh highest in the euro area, new figures from the Central Bank show 

For fixed-rate mortgages, which constitute 87% of all new mortgage agreements, the average rate climbed one basis point higher to 3.51%.

The average interest rate on new Irish mortgages increased marginally in September, rising to the seventh highest in the euro area. 

New figures released by the Central Bank of Ireland on Wednesday found that the average rate of a new mortgage rose by one basis point to 3.59% at the end of September. On an annual basis, the average rate had fallen by almost 50 basis points.

The equivalent euro area average in September was 3.34%, the regulator said, 25 basis points lower than the Irish average.

For fixed-rate mortgages, which constitute 87% of all new mortgage agreements, the average rate climbed one basis point higher to 3.51%. Meanwhile, the average variable rate fell marginally to 4.08% in September.

"This is the first time since January that the cost of mortgages has increased and could be a signal that not only has the trend of falling mortgage costs come to an end, we could now be entering a cycle of rising mortgage rates," said Trevor Grant, chairperson of Irish Mortgage Advisors.

"With all indications suggesting that the ECB will keep its rates on hold again when it meets before Christmas, mortgage holders need to be mindful that it’s unlikely there will be any more ECB rate cuts before the end of the year."

However, Mr Grant said competition remained the main influence on interest rates in Ireland, not the ECB.

"There is still plenty of competition out there amongst lenders for borrowers to take advantage of. Furthermore, the recent decision of PTSB to put itself up for sale is likely to lead to more intensified competition in the market in the New Year, if PTSB is taken over by another bank," he added. 

Meanwhile, renegotiated mortgages totalled €422m in the month, which was €80m higher than the previous month and €193m higher than September last year.

"The rising volume of re-mortgage/switching mortgages shows that Irish borrowers are becoming more proactive about securing better deals. It’s important that this momentum is built upon," Mr Grant concluded. 

For new consumer loans, the average rate fell by 15 basis points to 7.55% in September, with the total volume of loans amounting to €267m.

On the flip side, the average rate on overnight household deposits stood at 0.13% in September, which has remained unchanged since December 2024. For deposits with an agreed maturity, the average rate increased by seven basis points to 1.86%.

The weighted average interest rate on new household term deposits was the 8th highest in the euro area and 15 basis points above the Euro Area average, rising from 10th last month, the Central Bank said.