Irish mortgage rates fall marginally in April

Interest rates attached to home loans expected to fall over the coming months as ECB reduces headline rates

The average interest rate on a new mortgage agreement here was 4.24% in April. Photograph: iStock

Irish mortgage rates fell marginally in April, down from an elevated level the previous month, according to the Central Bank. However, there was little relief for borrowers, with the average rate attached to new home loans remaining close to a seven-year high.

The figures indicated that the average interest rate on a new mortgage agreement here was 4.24 per cent, down 0.07 per cent on the March average. However, the average rate was 61 basis points up annually. The equivalent euro area average dropped by 3 basis points to 3.81 per cent in April.

The latest data meant Ireland had the seventh highest rates in the euro zone, an improvement of one place from March, the Central Bank said.

The monthly figures came in advance of an anticipated European Central Bank rate reduction in June. The Frankfurt-based central bank trimmed its key lending rate, the one that affects mortgage rates, by 25 basis points to 4.25 per cent, down from the record high of 4.5 per cent.


Markets have been pricing in another two rate reductions this year but the future path for interest rates is unclear, with ECB policymakers failing to signal if another cut was imminent.

A surprise increase in euro zone inflation in May – accelerating to 2.6 per cent – suggests price growth could prove stickier than expected, as has been the case in the US where the Federal Reserve has delayed its own cycle of rate cuts.

“As expected the average interest rate fell in April from the previous month’s record high,” said Daragh Cassidy of price comparison site “And the rate should creep slightly lower over the coming months as the rate reductions that have been introduced by several lenders recently feed through into the figures.

“Already the average first-time buyer can get a fixed rate of under 4 per cent with PTSB and Bank of Ireland for example. And of course if the ECB cuts rates again over the coming months, which it probably will do at least once, that will hopefully put further downward pressure on mortgage rates,” Mr Cassidy said.

“Yet regardless of how quickly or by how much rates fall later this year the tens of thousands of mortgage holders on fixed rates which are due to come to an end over the next few months still need to be preparing for potentially higher repayments.

“Many mortgage holders who took out a fixed rate over the past three or four years may be enjoying rates as low as 2 per cent or 3 per cent at present. But they’ll still generally be faced with much higher rollover rates when they look to refix.”

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times