The latest Central Bank statistics show that in May, Ireland had the highest average interest rate on new mortgages in the Eurozone, at 3.21pc. Nearly twice the average of 1.8pc for the Euro Area.
Mortgage rates varied “significantly” across the Eurozone and while Finland had the lowest at less than 1pc, Ireland was the only member where the interest rate was above 3pc.
This means that Irish home buyers are paying thousands of euros more a year than mortgages holders on the continent.
While still being historically low for Ireland, the Central Bank stated that new mortgage agreements in the 12 months to May increased by 33pc.
The new mortgages volume amounted to €681 million in May, bringing new mortgage loans to €7.22 billion during the latest 12 months.
The report also shows a raise in popularity of fixed rates mortgages, with these now accounting for 54pc of new mortgage lending. However, this is still considered a low percentage when compared with the 80pc average of new agreements over the same period in the Eurozone.
When asked to comment about this mater, Michael McGrath the finance spokesman from Fianna Fáil said: “Mortgage interest rates charged in Ireland are entirely unjustifiable and the banks cannot be allowed to continue to fleece Irish consumers in this way.”
He also noted that: “This massive differential is impacting negatively on the quality of life of hundreds of thousands of individuals and families around the country.”
The high borrowing cost comes at a time when interest rates on term deposits remained low in May, only averaging around 0.06pc on new household deposits, compared to the 0.36pc Eurozone equivalent.
Author: Fran Cooke