Irish mortgage rates edge higher in February – Central Bank

April 12, 2024

New figures from the Central Bank show that average mortgage rates in Ireland rose to 4.29% in February from 4.27% in January.

The euro zone average mortgage fell for the third month in a row to 3.91%.

Today’s Central Bank figures show that Irish mortgage rates are currently the seventh highest in the euro zone, but rates varied hugely across the currency bloc from as low as 1.97% in Malta to as high as 6.05% in Latvia.

The Central Bank also said that the total volume of new mortgage agreements rose to €641m in February, a 18% increase from the previous month, and a decrease of 39% on the same time last year.

Meanwhile, interest rates on household overnight deposits remained at 0.13% in February, the highest level since December 2016, the Central Bank said.

The average interest rate on new household deposits with agreed maturity rose by eight basis points to 2.59% in February.

The Central Bank said the level of new business in this category was €907m, a 24% decrease on a monthly basis, but a 191% increase from February 2023 – however that is still well below historical levels seen before 2021.

The equivalent rate in the euro area was 3.17%, it added.

Commenting on today’s figures, Daragh Cassidy, head of communications at bonkers.ie, said that Irish mortgage rates have remained broadly steady over the past few months, and despite the month-on-month jump they still remain relatively close to the euro zone average.

Mr Cassidy said it seems highly likely that the ECB will start to cut interest rates from June and three or four 0.25 percentage point cuts could be made by the end of the year.

He said that tracker customers will benefit almost immediately from any cuts, but for everyone else, it will be less clear cut.

“The main lenders have passed on less than half of the ECB rate hikes to date. So the consensus has generally been that AIB, Bank of Ireland and PTSB might not respond widely to any rate cuts, at least immediately,” he predicted.

He noted that over the past three weeks AIB, EBS and Haven have cut their green mortgage rates, while PTSB cut its four-year fixed rate for the second time since December.

Bank of Ireland has also introduced a new, flat variable rate of 4.15% for all customers regardless of the loan-to-value ratio whereas previously it was as high as 4.75% in some cases, he added.

“This suggests the Irish mortgage market might be a bit more competitive than we’re generally led to believe. Still, it’s unlikely the main lenders will pass on the full amount of any upcoming ECB cuts seeing as they passed on less than half of the previous increases,” he added.

Article Source – Irish mortgage rates edge higher in February – Central Bank – RTE

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