Irish Mortgage Rates Dip, Still Above Euro Zone Average
Mortgage interest rates in Ireland have hit their lowest point in two years, yet remain higher than the average across the euro zone. New data highlights the nuances of the Irish mortgage market.
Rate Trends and Analysis
The Central Bank of Ireland reported Wednesday that the weighted average interest rate for new home loans was 3.66 percent in May. This represents a decrease of 0.5 percentage points over the preceding 12 months.
However, Irish mortgage rates still exceed the euro area average by 34 basis points. This places Ireland eighth highest among nations sharing the euro, a slight improvement from fifth place in April.
Darragh Cassidy, head of communications at Bonkers.ie, noted rates are at a two-year low, and further cuts from the European Central Bank (ECB) are anticipated. He advises exploring the variance in rates and using a mortgage broker.
Expert Perspectives
According to Fiona McMahon, senior mortgage adviser at NFP Ireland, some lenders have already responded to recent ECB moves. โNotably Avant Money, which became the first to reintroduce mortgage rates under 3 per cent since 2022.โ
McMahon also cautioned, โThat kind of competitive pricing remains the exception, not the norm.โ
Trevor Grant, chairman of Irish Mortgage Advisors, acknowledged the positive trend but stressed that Irish borrowers are still paying more than their European counterparts. He stated that the gap might narrow if lenders respond competitively.
Market Dynamics
Recent data indicates a surge in mortgage amounts for first-time buyers. Grant noted, โThe latest Banking and Payments Federation of Ireland (BPFI) data shows that the median mortgage for a first-time buyer has surged by 36 per cent since 2019, now sitting just shy of โฌ300,000,โ
adding this figure is higher in expensive areas.
Despite these pressures, mortgage approvals have reached record levels, indicating strong buyer interest, especially among first-time buyers.
Overall Lending Volume
The Central Bank also reported that the total value of new mortgages agreed in May reached โฌ943 million, a 15 percent increase compared to the same month last year. As borrowing increases, the U.S. personal savings rate has fallen to 3.2% in April 2024, suggesting consumers are spending more of their income (Trading Economics).