Ireland’s Mortgage Rates Continue Downward Trend, 10th Lowest in Euro Zone

Discover how Ireland's average mortgage rate decreased to 4.19% in December, positioning the country as having the 10th lowest rates in the euro zone.

The average interest rate on new mortgages in Ireland continued its downward trend for the third consecutive month in December, as reported by the Central Bank. At the end of December, the average rate stood at 4.19%, marking a decrease of 0.06 percentage points from November. This positioned Ireland as having the 10th lowest mortgage rates in the euro zone by the end of last year.

Ireland's Mortgage Rates Continue Downward Trend, 10th Lowest in Euro Zone

Fixed rate mortgages dominated the market, accounting for 81% of the total volume of new home loans during the period. The average rate on fixed rate mortgages was 4.14%, representing a 1.53% increase compared to December of the previous year. On the other hand, new variable rate mortgages carried an average rate of 4.4%, up 0.55% from the same month in 2023, but down seven basis points from November.

In terms of mortgage agreements, new mortgages worth a total of €980m were agreed upon in December, reflecting a 14% increase from November but a 22% decrease from the same month a year ago. The Central Bank also released data comparing average mortgage interest rates charged by non-bank lenders to those of main retail banks in December. On average, borrowers with mortgages from non-bank lenders were paying 4.52%, while those with mortgages from banks were paying 3.6%.

For variable mortgages, non-bank lenders charged an average rate of 6.09%, compared to 4.07% by banks. Tracker mortgage customers in non-bank lenders were paying 5.59% on average, slightly below the 5.6% average rate in banks. Fixed mortgage holders in non-bank lenders were paying 2.57% on average, compared to 2.95% by equivalent borrowers from banks. Overall, the average interest rate charged by actively lending non-banks was 3.03%, while non-lending non-banks charged an average rate of 5.56%.

The data from the Central Bank highlights the ongoing fluctuations in mortgage interest rates in Ireland, with fixed rate mortgages dominating the market and non-bank lenders charging higher rates on average compared to banks.