Interest rates on new Irish mortgages remain double euro-zone average

The average interest rate on new mortgages in the Irish market was 2.76 per cent in February, down from 2.79 per cent in February 2021, but still considerably above the euro-zone average of 1.36 per cent.

Figures from the Central Bank show that the weighted average rate on new fixed-rate mortgage agreements, which accounted for 81 per cent of all new agreements in the month, was 2.6 per cent. This was down from 2.65 per cent a year ago.

For new variable-rate mortgage agreements, interest rates averaged at 3.46 per cent in February, which was down from 3.54 per cent in January but up from 3.41 per cent in February 2021.

New mortgage volumes agreed at variable rates "are currently volatile", the Central Bank said, which likely reflects uncertainty about when and how many times the European Central Bank will increase its base rates.

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New mortgage agreements arrived at a total of €626 million in February, up 1 per cent year on year. Renegotiated mortgages amounted to €295 million and had a weighted average interest rate of 2.84 per cent.

Other loans

Meanwhile, the average interest rate on new consumer loans was 6.65 per cent in the month. Including renegotiations, new consumer lending stood at €206 million, up 41 per cent year on year.

Total non-financial corporation (NFC) loan agreements of €1.7 billion in February were up 70 per cent on February 2021. For new NFC loans of more than €1 million, the total was €1.56 billion, twice that seen a year ago.

Net lending to NFCs had turned negative during the pandemic. The weighted average interest rate for new loans to NFCs stood at 3.16 per cent in February, compared with 1.15 per cent in the euro area.