Ireland’s New Mortgage Rates Rise, Now Seventh Highest in Eurozone

In January, Ireland's average interest rate on new mortgages increased to 4.27%, making it the seventh most expensive in the euro area. Find out more about this shift in the latest data from the Central Bank.

The average interest rate on new mortgages in Ireland increased in January, making it the seventh highest in the Eurozone, according to data released by the Central Bank. The average interest rate for January stood at 4.27%, marking a 0.08% rise from the previous month. This places Ireland's new mortgage rates as the seventh most expensive in the euro area, a jump from the 11th position in December. In contrast, the average interest rate across the euro area decreased by 0.10% to 3.96% during the same period. This shift can be attributed to the recent easing of capital market funding costs in certain countries, in anticipation of a forthcoming decrease in ECB rates.

Ireland's New Mortgage Rates Rise, Now Seventh Highest in Eurozone

The Central Bank's data reveals that average rates on new home loans were 1.34% higher than in January of the previous year. Fixed rate mortgages currently account for three-quarters of new lending, with the average rate on these loans rising by 0.06% to 4.2%. On the other hand, the average rate on new variable mortgages increased by 0.07% to 4.47%. Turning to savings, the data shows that rates on new overnight deposits by households rose to 0.13% in January, reaching the highest level since December 2016. However, the average rate on new household term deposits actually decreased by 0.22% to 2.51% during the month, in comparison to the 3.2% rate in the euro area. Notably, households moved €1.19bn into Irish-based term deposit products in January, marking a 24% increase from December and indicating a decline in savers' inertia.

The rise in new mortgage rates in Ireland, coupled with fluctuations in savings rates, reflects the evolving financial landscape in the country. As economic conditions continue to shift, it will be crucial for consumers to stay informed and adapt to changing interest rate trends.