Remortgaging and switching activity surges in July

The ECB is meeting next month and is expected to increase interest rates again

According to the latest data from the Central Bank of Ireland, in June the average interest rate on new mortgages was down 11 basis points compared to last year, hitting 3.49%. Picture: iStock

A surge in switching and remortgaging activity during July led to the number of new mortgage approvals to increase by 14.4% compared to the same period last year, new data from the Banking and Payments Federation, Ireland (BPFI) shows.

Last month saw 6,253 new mortgages approved — up from 5,467 last year — with first-time buyers accounting for the largest share at 3,575, up 6.5% or 219. The total value of all these mortgages reached just over €2bn, up 15%, resulting in an average mortgage value of just under €326,000.

The combined value of first-time buyer mortgages increased by 6.5% to €1.18bn with an average mortgage value of €330,000.

Mover purchasers accounted for 1,255 new mortgage approvals, up 9.9%, with a combined value of €482m.

The largest year-on-year increase was seen in the remortgage and switching activity segment which saw an increase of 71.6% compared to last year to 887. The value of these mortgages reached €285m — up 81.1%.

Top up mortgages also saw an increase of 24.8% to 443 with a combined value of €71m. The only segment to record a decline was residential investment letting mortgages which saw a decline in approvals of 4.1% to 93 and a decline in value of 13.4% to €18m.

Chief executive of the BPFI, Brian Hayes, said the volume and value of mortgage approvals in July are “the highest monthly levels since the data series began in 2011”. “Although it's worth noting that mortgage approval activity typically peaks between May and July each year.” 

“Looking at the annualised figures, there were 55,307 mortgage approvals in the 12 months to July 2026, valued at €17.9bn. This represents a moderate increase on the 12 months to June 2026, with volumes up 1.44% and values up 1.51%,” he said.

“Taken together, the figures point to continued momentum in the mortgage market, with first-time buyers remaining a key driver and switching activity adding further to the lending pipeline.” 

The recent surge in the remortgage and switching activity could be in consumers looking to lock in lower rates in case interest rates increase once again in the coming months.

According to the latest data from the Central Bank of Ireland, in June the average interest rate on new mortgages was down 11 basis points compared to last year, hitting 3.49%. This means Ireland now has the 12th highest interest rates across the eurozone and it is the first time since February 2023 that these rates were below the eurozone average.

ECB interest rate

June also saw the European Central Bank (ECB) increase interest rates by 0.25 percentage points in response to the rise in inflation prompted by the surge in energy prices after the war between the US and Iran started.

The ECB opted not to increase interest rates further during its meeting in July but it is expected to increase rates again during its meeting next month depending on new inflation data.

In a recently released summary of the ECB’s July meeting, ECB officials discussed whether “mildly restrictive” monetary policy could be needed to ensure inflation returns to the 2% target.

Some of those at the meeting would have supported an interest rate rise last month, citing “the low likelihood of a situation in which a further rate hike would not be warranted”.

But with uncertainty high around the stickiness about inflation, “all members were willing to rally behind the decision to keep policy rates unchanged”.

Eurozone annual inflation during July was running at 2.9%, up slightly from 2.8% in June, and ahead of the ECB’s inflation target of 2%.

Additional reporting Bloomberg.