Irish mortgage interest rates remain the third lowest in the Eurozone, despite the European Central Bank (ECB) beginning to raise them.
The most recent rate increase, which brought the rate to 2.5% last Thursday, was one of many that the ECB has announced as part of its efforts to combat the inflation crisis.
These increases from the ECB are having a ripple effect here, increasing the average interest rate to 2.69 percent in December from 2.57 percent in November, according to the most recent data from the Irish Central Bank.
Even though, the Irish figure is still below the 2.95 percent average for the Eurozone, which is the highest rate since at least August 2017 and more than twice the rate from this time last year.
Malta had the lowest average interest rate for December (1.98 percent), followed by France (2.12 percent) and Ireland, while Latvia had the highest (4.65 percent).
Despite a month-over-month increase in Irish rates, Daragh Cassidy of Bonkers.ie noted that the figures are “exactly where they were in December 2021,” despite a more than two-fold increase in the Eurozone rate during the same period.
“These figures show once again how slow the Irish banks were to pass on the ECB rate increases initially.
“However that is now changing,” he warned, pointing to recent increases announced by Irish banks, including Bank of Ireland and AIB.
“Looking forward things don’t look great for those on tracker [mortgages], variable rates, or who are looking to buy over the coming months,” he said.
“The ECB is almost guaranteed to hike rates by another 0.50 percentage points when it meets in March and by another 0.25 percentage points before the end of summer. This will take the main lending rate to 3.75 percent and mean yet more rate increases from all the lenders are guaranteed over the coming months.”