Mortgage interest rates fall slightly in June
The average interest rate on new mortgages in Ireland fell slightly in June, according to new figures from the Central Bank.
The average interest rate on new mortgages was 3.6%, down one basis point from 3.61% in May.
The average fixed rate was 3.52%, while the average variable was 4.08%.
Despite the downward trend, Ireland is still one of the more expensive countries in the euro zone for home loans, with the average rate for the euro area standing at 3.29%.
Ireland had the seventh highest average rate in June, up from the eighth highest the previous month.
Latvia topped the list with an average rate of 4.15%, while Malta had the lowest at 1.72%.
Trevor Grant, chairperson of Irish Mortgage Advisors, said there are many reasons for Ireland being one of the more expensive euro zone countries for mortgages.
“For example, Irish lenders are required to hold more capital than many of their European peers,” he explained.
“Also, when a borrower defaults on a mortgage, Irish lenders have stated that they often find it more difficult than other European lenders to take control of and sell off the assets that were pledged as collateral to secure the mortgage.
“Notwithstanding all this, there is still room for improvement and slowly competition is bringing rates down,” he added.
Mr Grant said this all comes against the backdrop of the ECB’s decision to pause rate cuts last month.
“This significant shift in ECB policy could not only mark the end of its rate cutting cycle, it could also herald that ECB rate hikes might be on the cards in late 2026, particularly if inflation starts to edge upwards in the EU again,” he said.
“So mortgage borrowers and would-be house buyers should be mindful that the pace of further mortgage rate cuts is likely to slow or even come to an end.
“Borrowers should therefore avoid making large financial decisions based on the hope that ECB rates will drop further or indefinitely,” he added.
However, Mr Grant said there is still plenty of competition amongst lenders.
“Some lenders started offering sub-3% mortgage rates this summer, which represented a significant milestone for Irish borrowers and should lead to substantial savings for homeowners and house buyers,” he said.
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