Irish mortgage customers paying more than twice euro zone average

Latest Central Bank data shows Irish lenders are among the costliest for home loans

The differential costs Irish consumers almost €80,000 on a €300,000 mortgage over 30 years. Photograph: iStock

The differential costs Irish consumers almost €80,000 on a €300,000 mortgage over 30 years. Photograph: iStock

 

Irish banks to continue to charge consumers some of the highest mortgage rates in the euro zone, figures from the Central Bank of Ireland (CBI) show.

The regulator’s latest monthly data on interest rates shows the average rate charged on new mortgages here in October was 2.73 per cent.

This compares to a euro area average of 1.28 per cent.

The differential costs Irish consumers almost €80,000 on a €300,000 mortgage over 30 years.

The premium levied on Irish borrowers has been linked to a lower level of profitability in the Irish banking sector and a lack of competition in the mortgage market here, which is likely to get worse with the Ulster Bank and Belgian lender KBC both intending to exit the market.

Switching

“While the average interest rate hasn’t changed that much, switching is increasing as more and more homeowners are becoming aware of better terms being available in the market,” said Trevor Grant, chairman of the Association of Irish Mortgage Advisors.

“ There has been an absolute surge in interest rate awareness amongst homeowners,” he said.

“The increased volume of switching is being driven by the ongoing rate cuts resulting in increased competition, and rising property values resulting in more people qualifying for better loan to value deals,” he said, noting KBC and Ulster bank customers are increasingly interested, given their lenders are leaving the market.