Residents of the Republic continue to pay higher mortgage interest rates than most of their European counterparts, new figures show.
The average interest rate on new Irish mortgage contracts was 2.8% in May, down seven basis points from the same month a year earlier.
This compares to an EU average of 1.27 percent and means mortgage holders in the Republic pay the third highest interest rates in the euro area.
New mortgages with a combined value of 573 million euros were entered into in May in the state, up 52% from the same month a year earlier, when deals fell significantly due to the Covid crisis. New mortgages increased 4% from April 2021.
For new fixed-rate contracts, which represented 79% of all loans, the average rate was 2.64%, down 10 basis points from May 2020.
Renegotiated mortgages totaled 189 million euros in May, down 66% from the previous month, with the weighted average interest rate rising to 2.74%.
“The slight drop in interest rates year over year is obviously welcome. However, that doesn’t mask the fact that rates here remain very high compared to our European neighbors, ”said Daragh Cassidy of Bonkers.ie.
“The average first-time home loan is now around € 250,000, according to BPFI. Someone who borrows this amount over 30 years pays an additional $ 192 per month or more than $ 2,300 per year. It’s a huge difference, ”he added.