Republic has highest average mortgage rate in euro zone

The Republic continued to have the highest average interest rate for mortgages across the euro zone in June, new figures from the Central Bank show.

The average rate on all new mortgages agreed in June stood at 3.23 per cent, the regulator said. The rate varied considerably across states, but the average for the euro zone being 1.78 per cent.

Data for the second quarter shows a decrease in standard variable rates for new mortgage drawdowns on private homes. Rates fell by 21 basis points (0.21 of a percentage point) over the past year, standing at 3.13 per cent at the end of June.

Monthly data for June show a weighted average interest rate on new variable rate mortgage agreements of 3.29 per cent, which was a decrease of four basis points on the previous month. New business rates averaged 3.3 per cent over the first half of 2018.

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Almost half of new mortgage drawdowns for private homes during the quarter were fixed for more than three years.

Overall, fixed-rate mortgages accounted for 59 per cent of new agreements over the three months, compared with 80 per cent of new agreements over the same period in the euro zone. The average fixed rate for the year to date stands at 3.11 per cent.

New agreements

There was a 34 per cent increase in new mortgage agreements in the 12 months to June. The volume of new mortgage agreements amounted to €811 million in June, bringing new agreements to €7.5 billion over the past 12 months.

Variable mortgage rates for new buy-to-let mortgage drawdowns averaged 4.72 per cent during the quarter, which was a decrease of just one basis point from the same period last year.

Fixed rate buy-to-let mortgages decreased by 14 basis points to 4.52 per cent over the same period.

Total renegotiated mortgages amounted to €453 million in June, with fixed rate products accounting for half of renegotiations. The weighted average interest rate for renegotiated mortgages was 2.98 per cent in June.

Interest rates on new household term deposits remained low in June, at 0.05 per cent. This represented a three basis point decline over the last year. Equivalent euro zone rates experienced a decline of four basis points over the same period, but remain higher at 0.36 per cent.

The household loan to deposit spread stood at 399 basis points in June, which was an increase of seven basis points on the previous month.