IRISH MORTGAGE RATES remain well below the EU average but have increased in June despite ECB rate stability according to the Central Bank.
Outstanding household loan rates in Ireland increased by 4 basis points in June to stand at an average of 2.92 per cent, below the average across the euro area of 3.43 per cent. Irish mortgage rates have remained relatively stable over the past year with a twelve-month average of 2.94 per cent.
Mortgage rates in Ireland are comparatively low by European standards because of a higher proportion of tracker mortgages in the country. Tracker mortgages follow the ECB’s base financing rate which is currently at a record low level but the Central Bank says that Irish interest rates have “diverged somewhat” from the ECB over the past year.
While the ECB rate remained unchanged over the period of July 2012 to end-April 2013 Irish mortgage rates increased by 14 basis points.
In May of this year the ECB’s rate decreased by 25 basis points to 0.5 per cent. This was reflected in an 8 basis point fall in the Irish rate and a 6 basis point fall in the euro area.
The interest rate on new mortgage loans in Ireland was 3.21 per cent at end-June 2013 also showing a small increase of 2 basis points compared with May 2013.