Mortgage rates rise ahead of pending ECB increases

mortgage rates

Central Bank of Ireland figures from March 2022 show that mortgage rates in Ireland are among the most expensive in the Eurozone. That’s second only to Greece.

Yet rates are starting to increase, ahead of a possible rise in European mortgage rates as early as July.

A first-time buyer in Ireland will take out a mortgage of about EUR 270,000, paying EUR 176 extra per month or EUR 2,100 per year more than the average in the Eurozone. That’s over a 30-year term.

In March, borrowers paid an average rate of 2.78pc, which is up by 0.2 percentage points from February. However, the average rate across the Eurozone was up by 0.9 percentage points in March to 1.46pc. That’s the highest level in 36 months.

Meanwhile, Avant Money and ICS Mortgages have increased their rates, and Permanent TSB, Bank of Ireland, and EBS have reduced some of their rates.

Irish banks justify higher lending rates because they struggle to enforce security if a borrower can’t pay back the loan. Therefore, they have to hold around triple the capital to protect against potential loan losses compared to other European banks.

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