Latest Central Bank figures show that the Irish mortgage rate ripoff continues

Latest figures from the Central Bank show that Irish mortgage customers continue to pay way higher interest rates than customers in any other country in the Eurozone. So why are we paying so much and what can be done?  

According to the Central Bank, the average interest rate on a new mortgage in Ireland is 3.21%. Although low for Ireland by historical standards, and a drop from 3.38% in 2017, this compares to an average rate of 1.80% across Europe and a rate of just 0.80% in Finland - a country with a similar population to Ireland.

What this means is that a first-time buyer who takes out a mortgage of €250,000 in Ireland over 30 years would pay around €1,082 a month based on average rates. In Europe they would pay on average €899.

This means mortgage customers in Ireland are paying an extra €183 a month to the banks (or almost €66,000 extra over the lifetime of a mortgage).

Ireland monthly


Eurozone monthly repayment

Finland monthly repayment

€1,082 (3.21% average interest rate)

€899 (1.8% average interest rate)

€781 (0.8% average interest)

The figures also show that the popularity of fixed rates continues to rise and these now account for 54% of new mortgage lending. However, this is still low by European standards where 80% of mortgages are fixed.

Why are mortgage rates in Ireland so high?

There is still a lack of competition in the Irish mortgage market as it remains heavily concentrated in the hands of a few main banks; mainly AIB, Bank of Ireland, and Ulster Bank. And although the market has heated up in recent times, the level of competition is still below where it should be and this has lead to higher rates.

Irish banks also have a large number of tracker mortgages on their books. These ultra low-rate mortgages make little, if any money, for the banks, so they’re recouping their losses by charging new customers much higher rates.   

What can people do to combat high rates?

If you’re a first-time buyer who’s at the start of the mortgage journey, make sure you do your research and shop around. Remember that you don’t have to be an existing customer with a particular bank to get a mortgage off them.

There’s now a huge variation in interest rates and cashback incentives across all the different lenders so find out who’s offering the best deal for you.

If you already have a mortgage, then look into switching. In recent times Irish mortgage holders have been reluctant to switch, which is crazy given the potential savings involved.

Many lenders now have dedicated switch teams in place to make the process as easy as possible so it often won’t be as much hassle as you think it might. And while there are costs associated with switching mortgage provider, in some cases banks will provide a cashback incentive to those who switch or a contribution towards the legal fees. 

To see exactly how much you could save by switching, check out our handy mortgage calculator. 


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