Mortgage rates in Ireland continue to creep lower but savings still depend on shopping around.
There’s finally some good news for Irish mortgage holders and first-time buyers: mortgage rates have dropped to their lowest level in more than two years.
According to new figures from the Central Bank of Ireland, the average interest rate on a new mortgage is now 3.66%, down from 3.72% in April and well below the 4.17% rate recored in May of last year.
The fall reflects the recent numerous rate cuts by the European Central Bank, and signals that lenders are slowly beginning to pass on these reductions to customers.
And while Irish mortgage rates still remain slightly above the Eurozone average of 3.32%, the gap is narrowing. For years Ireland was an outlier in Europe, stuck with some of the highest home loan rates in the currency bloc. Now, we’re finally beginning to catch up — though there's still a bit to go.
Huge variation across Europe... and here at home
Rates continue to vary massively across the Eurozone — from as low as 1.80% in Malta to as high as 4.29% in Latvia.
And the variation isn’t just in Europe. Here in Ireland, the gap between the cheapest and most expensive mortgage rates is still surprisingly wide. As while the average rate is 3.66%, it's just an average. Much higher and lower rates are on offer.
For example, for a first-time buyer borrowing €300,000 with a 10% deposit, variable rates currently range from 3.18% to 4.70%, while three-year fixed rates range from 3.20% to 4.85%.
To put this into money terms, Avant Money currently offers a variable rate of 3.18%, while AIB’s equivalent rate is 4.15%. On a €300,000 mortgage over 30 years, that’s a difference of around €164 a month, or almost €2,000 a year.
And if you went with one of the most expensive rates on the market at 4.70%, your monthly repayment could be over €261 higher than with the cheapest option. That adds up to over €3,000 a year — for the exact same mortgage amount.
That's why it's so important to shop around...
Compare the market
There are 10 lenders in the Irish mortgage market at present and there’s a wide variation in rates across them all. And different lenders offer different cashback deals and incentives, which also need to be taken into account.
So if you're a first-time buyer or looking to switch your mortgage over the coming months it's vital to compare the market and shop around when applying for a mortgage. A good broker will help you find the best rates for your particular circumstances.
And remember, you don’t have to have a current account or any type of relationship with a mortgage provider in order to apply for a mortgage with them. So don’t just “go with what you know”.
Get your mortgage with bonkers.ie
If you’re hoping to get your foot on the property ladder over the coming year, or are looking to save money by switching to a different lender, remember that bonkers.ie is here to help. We're more than just a comparison service!
With our mortgage broker service our team of experienced financial advisors here in Dublin can help you with your entire mortgage journey from application to drawdown.
We work with the country's top lenders so can find you the best mortgage rate for your particular circumstances. We can also apply to multiple lenders at the same time on your behalf, increasing your chances of getting approved for a mortgage, and saving you the time and hassle of having to apply to numerous lenders by yourself. We can also help you with getting mortgage protection and home insurance too.
And the best news is that our service is entirely free and fully digital from start to finish, meaning everything can be done online from the comfort of your home! But don't worry, our team is only ever a phone call away if you need help or clarification on anything.
