New mortgage interest rates fall below EU average for first time since February 2023

The ECB are expected to increase rates again when it meets next month

The total volume of new mortgage agreements increased to €1.1bn in June. 

The average interest rate charged on new mortgages in June stood at 3.49% during June, down 11 basis points compared to last year, dropping the rate below the eurozone average for the first time since February 2023.

The equivalent eurozone average was 3.51% last month making the Irish rate the 12th highest in the bloc, down five places from June 2025.

The weighted average for new fixed-rate mortgages, which accounts for 93% of all new mortgages, stood at 3.46%, two basis points higher compared to May but down six compared to June last year.

The weighted average interest rate on new variable-rate mortgage agreements was 3.96% in June, the lowest level since December 2022 — down seven basis points from May and by 12 basis points year-on-year.

The total volume of new mortgage agreements increased to €1.1bn in June, up €129m compared to May, and up €86m compared to June last year.

Renegotiated mortgages totalled €586m in June, €80m higher than the previous month and €301m higher than June 2025. By the end of June, 94% of renegotiated mortgages had fixed interest rates.

Daragh Cassidy, of price comparison website Bonkers.ie, said in recent weeks rates in many eurozone countries have edged upwards as a result of the European Central Bank’s rate hike in June and in anticipation of further hikes later in the year.

“However Irish mortgage rates have remained steady. Although we've seen rate increases from some of the smaller lenders, such as ICS Mortgages and Nua Money, rates from AIB, Bank of Ireland and PTSB, which together account for around 90% of all new mortgage lending in Ireland, have remained unchanged,” he said.

“This is because these lenders are able to rely on their sizeable deposit base for a large portion of their mortgage lending, so they’re less exposed, in the short term, to changes in wholesale funding costs arising from ECB rate hikes.” 

Mr Cassidy added that the 3.49% rate is just an average and there are “are 10 lenders in the Irish mortgage market at present and there’s a huge variation in rates across them all, with the gap bigger than ever”.

“If you were borrowing €300,000 over 30 years, the difference between going with the cheapest and most expensive lender for a three-year fixed rate is almost €400 a month or almost €4,800 a year for example,” he said, as he encouraged consumers to shop around for the best deal.

Consumer loans

In terms of new consumer loans, the average interest rate charged increased by 23 basis points compared to May to 7.84%, but this is down 43 basis points compared to June last year.

The total volume of new consumer loans was €266m in June, 77% of which had a floating rate.

The average interest rate on household overnight deposits was 0.14% while the average interest rate on new household deposits with agreed maturity increased to 1.86% in June.

Ireland had the 13th highest interest rates on household deposits with agreed maturity in the eurozone.

The level of new business in this category was €1.6bn, the highest increase since October 2025.

The ECB are due to meet again next month in order to discuss a further interest rate hike. The bank did not change interest rates during its previous meeting in July with the market largely forecasting an increase of at least 25 basis points when the ECB Governing Council meets again.