Mortgage interest rates in Ireland are beginning to ease slightly. But compared to the rest of Europe, we’re still near the top of the table — and not in a good way.
According to the Central Bank of Ireland, the average interest rate on new home loans in February was 3.79%. That’s down just 0.03% from January and 0.5% lower than the same time last year. While it’s a move in the right direction, we’re still well above the eurozone average of 3.33%.
That 0.46% gap puts Ireland as the fifth most expensive country in the EU for mortgage interest rates.
Mortgage Lending on the Rise
Despite higher rates, new lending is growing.
The Central Bank reported that €779 million worth of new mortgage agreements were signed in February. That’s up €105 million from January and up 22% year-on-year.
More borrowers are entering the market, possibly anticipating that rates may fall further — or simply feeling that they can’t wait any longer.
ECB Cuts Expected, But Banks Are Slow to Respond
The European Central Bank is due to meet next week to decide on another potential rate cut. Market watchers expect a 0.25% drop, with another possibly coming in June.
So far, though, Irish banks have been slow to pass on savings. According to Ross Lynch, a senior mortgage advisor at NFP Ireland, “Despite the ECB’s rate cuts, Ireland remains one of the five most expensive countries in the EU for mortgage rates.”
He noted that banks have been reluctant to drop rates quickly, arguing they didn’t raise them as steeply as the ECB during the recent tightening cycle.
That slow pace means many borrowers — especially those not on tracker mortgages — won’t feel much relief anytime soon.
What’s Driving This?
The wider economic picture isn’t helping. Tariff tensions between the US and EU are putting pressure on inflation forecasts, which affects how the ECB sets its policy.
Olli Rehn, Governor of the Bank of Finland and a member of the ECB’s council, said this week that the case for rate cuts has “clearly strengthened” due to the ongoing slowdown and risks to growth.
Still, even with ECB action, Irish lenders may not be quick to react. That’s why being proactive is so important right now.
What You Can Do
If you’re a first-time buyer, or considering switching your mortgage, don’t wait for rates to fall on their own.
Even small differences in rate offers between banks can mean thousands saved over the life of your loan. Some lenders are quietly improving deals for new customers, even if headline rates haven’t shifted much.
Need Help Figuring Out Your Next Step?
The mortgage market is changing, but not evenly. Some banks are moving quicker than others — and unless you’re comparing the full picture, it’s easy to miss a better deal.
If you’re looking to switch, buy, or just plan ahead, now’s the time to get expert advice.
Talk to an All Financials mortgage advisor today and see what options are open to you.
Author: Fran Cooke
