Property & Mortgages

We're paying €80,000 more than the average mortgage in eurozone

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Ged Nash criticised high rates. Photo: Tom Burke
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Ged Nash criticised high rates. Photo: Tom Burke

Mortgage rates in this country are more than double the average being charged in the eurozone.

It means that a new home buyer is paying €80,000 more over the term of a typical mortgage than the average in the currency zone, according to brokers.

New figures show that interest rates on home loans here are the third highest in the currency zone.

Only lenders in Latvia and Greece charge more, according to the Central Bank.

The average rate on a new mortgage was up slightly to 2.82pc in July. This is more than double the average for the euro area of 1.35pc.

"Ireland had the third highest mortgage interest rate across the euro area in July," the Central Bank said.

The chief executive of Brokers Ireland, Diarmuid Kelly, worked out that the difference in rates charged here compared with the average in the eurozone amounts to thousands of euro more being paid in this country.

He said the difference meant Irish consumers end up paying €80,000 more than most of their eurozone counterparts, on a €300,000 mortgage over 30 years.

Mr Kelly encouraged those who have not reviewed their mortgages for some time to do so.

"Switching your mortgage has become a lot easier than in the past. If in doubt contact your broker who will undertake the work for you," he said.

The Central Bank's 'Retail Interest Rates' statistical release also shows a huge drop in the value of mortgage lending in July compared with the same month last year.

The volume of new mortgage agreements amounted to €556m in July, a fall of 35pc on July last year.

However, it was a 13pc increase when compared with the previous month, which is the second consecutive monthly increase since March.

Mortgage rates have come down in the past year. Permanent TSB announced a cut in its variable and fixed rates in July.

And Avant Money is to enter the market this autumn, in a move expected to put massive pressure on existing lenders to slash their rates.

Labour finance spokesperson Ged Nash criticised the continuing rise in interest rates on loans for new homeowners and businesses at a time when banks can borrow at near 0pc or below.

Irish Independent

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