Irish borrowers opting for fixed rate mortgages

Lending for principal homes increased for the eighth consecutive quarter

Fixed rate mortgages represent 23 per cent of the PDH market. Photograph: iStock

Fixed rate mortgages represent 23 per cent of the PDH market. Photograph: iStock

 

Irish borrowers are increasingly opting for fixed rate mortgages in anticipation of a hike in interest rates by the European Central Bank as it draws to a close its quantitative easing programme.

Fixed rate mortgages represent 23 per cent of the principal dwelling home (PDH) market having increased by €1.2 billion in net terms in the first quarter compared to the last quarter of 2017.

Trends in personal credit and deposits published by the Central bank of Ireland show PDH lending increased for the eighth consecutive quarter.

On the buy-to-let (BTL) property front, repayments outstripped new lending by €1.2 billion. That compares to the scenario in fixed rate lending for PDH properties where new drawdowns exceeded repayments by €1.2 billion.

The Central Bank’s figures also show Irish households increase their deposits at the highest annual rate since the end of 2008, despite paltry rates for savers.

On an annual basis, household deposits grew by €3.4 billion, or 3.7 per cent, by the end of the first quarter this year.