Irish mortgage rates remain ‘stubbornly high’, new figures show

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Irish mortgage interest rates continue to be the second highest in the eurozone, latest Central Bank figures show.

The weighted average interest rate on new mortgages was 2.78 percent in February, down 12 basis points from the same month a year earlier, but more than double the EU average by 1.27 percent.

The average fixed-rate mortgage, which accounted for 82 percent of all new home loans in February, was unchanged from the previous month at 2.65 percent.

Variable mortgage rates averaged 3.41%, up six basis points from January.

In total, mortgages totaling 617 million euros were taken out in February, up 7% from the same month a year earlier and 23% from January.

Renegotiated mortgages reached 295 million euros in February, the highest level of renegotiations since September 2020, with the weighted average interest rate on these loans standing at 2.84%.

The figures

Commenting on the numbers, Trevor Grant, chairman of the Association of Irish Mortgage Advisors, said mortgage rates remain “stubbornly high”.

‘Ireland’s high interest rates have been a long-standing problem and, although certain banking and legal factors currently ensure that they will remain above average, there is still work that can and must be done to reduce interest rates as a whole.

“New and existing borrowers can save thousands of dollars in interest over the life of their mortgage. This is especially the case for existing borrowers currently at rates between 3 and 3.5 percent. Many can easily switch to rates closer to 2%, which would save a lot of money over the life of their loan, ”Grant added.

Brokers Ireland said Irish mortgage holders are currently paying more than double what most of their counterparts.

It costs an Irish mortgage lender a loan of € 300,000 over 30 years over € 82,000, said Rachel McGovern, chief financial officer.

“In effect, this means that all new mortgage holders since the 2008-2010 financial crash are paying the fallout because Irish lenders are forced to hold larger capital reserves,” she added.

Given that Irish lenders have now discharged the majority of their bad debts, it is questionable why lenders are still required to hold such reserves, McGovern added.

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