New data from the Central Bank of Ireland reveals that mortgage rates have reached a new low, with the average rate at 4.08% in September, down slightly from 4.11% in August. This decrease marks Ireland’s lowest rate level since last summer, and while promising, it still positions our country as having the sixth-highest mortgage rates in the Eurozone. In contrast, the average Eurozone mortgage rate dropped from 3.71% to 3.59% over the same period, highlighting a slower rate of decrease in Ireland compared to other countries.
Comparative Rates Across the Eurozone
Irish mortgage rates remain notably higher than in many other Eurozone nations, where rates vary widely—from as low as 1.76% in Malta to as high as 5.28% in Latvia. Latvia, along with Estonia and Lithuania, leads with the highest mortgage rates in the region. Within Ireland, fixed-rate mortgages, which constitute about 70% of new mortgage agreements, carried an average rate of 3.93% in September, showcasing a slightly lower option for borrowers opting for stability.
Increased Mortgage Lending Volume Reflects Strong Demand
The total volume of new mortgage agreements in Ireland increased significantly, jumping from €851 million in August to €930 million in September—an impressive 9% rise month-on-month and a 30% increase from the same period last year. Additionally, renegotiated mortgage agreements amounted to €229 million, underscoring a strong interest among borrowers to reassess their mortgage terms in light of shifting rates.
Deposit Rates Remain Low Amidst Falling Mortgage Rates
For savers, the picture is less encouraging. While mortgage rates are dropping, deposit rates remain largely stagnant, with household overnight deposit rates holding steady at 0.13% for the ninth consecutive month. The weighted average interest rate on new household deposits with agreed maturity edged up slightly to 2.63% in September, still below the Eurozone average of 2.98%. In terms of volume, new deposits with agreed maturity reached €1.2 billion, marking an 8% increase over the previous month and a 31% increase from September 2023.
ECB’s Ongoing Rate Cuts and Future Outlook
These latest changes coincide with the European Central Bank’s (ECB) ongoing efforts to lower rates to stabilise the economy, with another rate cut expected at its December meeting. Should this cut take place, it may further reduce mortgage costs for Irish borrowers, especially those on variable and tracker rates, while also potentially impacting deposit interest for savers.
A Strategic Time for Irish Borrowers
With mortgage rates at their lowest point in over a year, prospective homeowners and current mortgage holders may find this a promising time to explore their options. As lender competition grows and further ECB rate cuts are expected, now is a great time to consult a mortgage advisor to explore refinancing options or secure a more favourable loan.
Author: Fran Cooke
