Ireland has climbed to seventh place among eurozone countries for mortgage costs, despite experiencing falling interest rates, according to new Central Bank statistics that highlight the persistent challenge of expensive home lending in the Irish market.
The average interest rate on new Irish mortgage agreements reached 3.6% at the end of June, compared to the eurozone average of 3.29%. While this represents the lowest rate since April 2023, Ireland’s position worsened as rates fell faster in other European countries.
Trevor Grant, chairperson of Irish Mortgage Advisors, attributed Ireland’s high costs to regulatory requirements that force Irish lenders to hold more capital than European counterparts. He also cited difficulties Irish lenders face when attempting to recover assets from defaulted mortgages compared to other European markets.
The findings come as mortgage advisors warn borrowers against delaying financial decisions in hopes of further rate cuts. Grant cautioned that the pace of mortgage rate reductions is likely to “slow or even come to an end” following the European Central Bank’s decision to pause rate cuts last month.
However, competition is gradually improving conditions for borrowers. Some lenders began offering sub-3% mortgage rates this summer, representing a significant milestone that could deliver substantial savings for homeowners and house buyers.
Colin Rockett, Senior Mortgage Advisor with NFP Ireland, warned that proposed 15% tariffs on EU imports to the US could drive up inflation across Europe, potentially forcing the ECB to raise interest rates in coming years and putting additional pressure on mortgage borrowers.
Both advisors emphasized the importance of proactive mortgage shopping, with Grant noting that “customer apathy means many are paying more for their mortgage than they need to.”