Good news for buyers as mortgage rates continue to fall
Mortgage interest rates have continued to drop, bringing Ireland closer in line with the European average.
According to figures released on Tuesday by the Central Bank, the average Irish mortgage rate is now 3.66%. This marks a decrease from 4.17% in May of last year and brings the Irish average closer to the eurozone’s 3.32%.
Mortgage interest rates have continued to drop. Pic: Shutterstock
These figures come as the number of mortgage approvals has also risen.
It is expected the lower rates will make it even easier for first-time buyers to enter the market.
The average Irish mortgage rate is now 3.66%. Pic: Getty Images
While the average Irish rate has fallen to 3.66%, it stands at 1.80% in Malta and as high as 4.29% in Latvia.
Despite the fall in rates, affordability in the housing market remains a concern. Trevor Grant, chair of the Association of Irish Mortgage Advisors, pointed out that while falling rates are a positive sign, ‘borrowers here are still paying more than some of their European counterparts’.
Irish mortgage rates are said to have benefited from falling European Central Bank (ECB) rates. Pic: Shutterstock
He said: ‘One in three first-time buyer homes were valued over €400,000 in 2024, three times the 2019 share… And it has recently been reported that average household incomes for new buyers sits at €85,000, so it’s clear that affordability continues to be stretched.’
Experts have also raised concerns that, without an adequate increase in housing supply, lowering mortgage rates may mean very little.
Fiona McMahon, a senior mortgage adviser from NFP Ireland, warned that ‘rate cuts can help with affordability but only to a point. Without significant improvements in housing availability, we risk fuelling more competition for fewer homes which drives up prices and ultimately cancels out the benefit of lower interest rates’.
