Irish mortgage rates remained near a record low in December and ranked third lowest in Europe, according to the Central Bank.
However the impact of recent ECB rate rises is finally beginning to show up in the Irish figures, following a rise to 2.69% from 2.57% between November and December.
However the 0.12 percentage point increase was still smaller than the increase seen in the majority of other Eurozone countries, meaning Ireland still has the third cheapest mortgage rates in the Eurozone.
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Malta has the lowest average rate at 1.98% and even saw its rate fall compared to the previous month. Latvia has the highest rate at 4.65%.
Over the past five or six years, mortgage rates in Ireland have been around 1.3 to 1.5 percentage points above the Eurozone average
The Eurozone average is 2.95%, its highest level since at least August 2017 and over double the rate compared to this time last year. On the other hand, despite December’s jump, Irish rates haven't moved over the past year.
Darragh Cassidy, Head of Communications at bonkers.ie said it shows how slow the Irish banks were to pass on the ECB rate increases initially.
He stressed that Bank of Ireland has now raised its fixed rates by one percentage point over the past few months while AIB has hiked some of its fixed rates by up to 1.75 percentage points and last week, became the first main lender to hike its variable rates.
"Someone who applies for a mortgage today will be faced with much higher rate options. For example the cheapest fixed rate in the entire market is now 2.90% with Bank of Ireland.
"However this is a green rate and to get this you must borrow at least €250,000 and buy a property with a BER of at least B. The average rate for a mortgage applied for today is now well over 3%," he explained.
Mr Cassidy admitted that looking forward, things don’t look great for those on trackers, variable rates or who are looking to buy over the coming months.
He added that the ECB is almost guaranteed to hike rates by another 0.50 percentage points when it meets in March and by another 0.25 percentage points before the end of summer.
"This will take the main lending rate to 3.75% and mean yet more rate increases from all the lenders are guaranteed over the coming months.
“It’s not all bad news. Rising rates will also mean slightly better rates for savers. Though with inflation still near record levels, and Dirt at 33%, returns won’t be anywhere near enough to match inflation," he concluded.
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