Irish mortgage interest rates remain higher than euro area average

Average interest rates on new loans to Irish households for home purchase, either floating or fixed, fell by four basis points to 3.15 per cent in June, but remained higher than equivalent euro area rates.

Figures from the Central Bank show interest rates on outstanding loans to households for house purchase declined to 2.74 per cent, which was also higher than its equivalent euro area rate.

Before the financial crash, mortgage interest rates here closely tracked movements in the ECB’s main refinancing rate (MRO) more than comparable euro area rates.

This reflected the higher proportion of tracker and variable rate mortgage products in the Irish market which are linked to the ECB’s rate.

However, in recent times the average Irish interest rate on outstanding mortgages has “diverged” from the ECB’s main rate.