IRELAND IS THE seventh most expensive country in the euro area to take out a mortgage despite falling interest rates, according to Central Bank statistics released today. 

The Irish average mortgage rate is the lowest it has been since April 2023.

However, as rates fall faster elsewhere, Ireland has climbed one place higher in the rankings of most expensive eurozone countries to take out a mortgage.

The average interest rate on new Irish mortgage agreements was 3.6% at the end of June, in comparison to the eurozone average of 3.29%.

Trevor Grant, chairperson of Irish Mortgage Advisors, said the rules imposed on Irish lenders are contributing to Ireland being one of the more expensive countries in the eurozone for home loans.

He said: “Irish lenders are required to hold more capital than many of their European peers. Also, when a borrower defaults on a mortgage, Irish lenders have stated that they often find it more difficult than other European lenders to take control of and sell off the assets that were pledged as collateral to secure the mortgage.”

Grant advised mortgage borrowers to avoid making large financial decisions in the hope that interest rates will further drop.

He said the pace of further mortgage rate cuts is likely to “slow or even come to an end” due to the European Central Bank’s decision to pause rate cuts last month.

Instead, he advised borrowers to asses their mortgage options and secure a strong mortgage deal now.

Grant said there is “still room for improvement” and competition is slowly bringing down interest rates.

“There is still plenty of competition out there amongst lenders and for borrowers to take advantage of. Some lenders started offering sub-3% mortgage rates this summer, which represented a significant milestone for Irish borrowers and should lead to substantial savings for homeowners and house buyers,” he said.

“Borrowers, however, need to be proactive. Customer apathy means many are paying more for their mortgage than they need to. Now is the time to assess your mortgage options carefully. The window for securing a strong deal is open, especially as lenders continue to price more competitively.”

Colin Rockett, Senior Mortgage Advisor with NFP Ireland, said the interest rate reductions in Ireland are “modest and not fast enough to keep pace with wider eurozone trends”.

He warned that the 15% tariffs on most imports from the EU to the US could push up inflation in Ireland and across the EU, which may cause an increase in ECB interest rates in the coming years.

A rise in ECB interest rates means mortgage borrowers could come under pressure.

Rockett advised borrowers to speak with advisors about potential savings on their current mortgage through switching or locking in better terms.