Irish Mortgage Rates Drop Slightly in February as Main Banks Slow to Pass on ECB Rate Increases

Irish mortgage rates have been among the most expensive in the European Union, but that may be about to change. In February, Irish mortgage rates dropped unexpectedly, making them among the cheapest in the euro zone. This impressive shift, a surprise to both researchers and industry experts, could significantly impact the housing market and those looking to buy their first home. In this article, we will explore what led to this drop, and what it could mean for potential homebuyers in Ireland.


According to recent data from the Central Bank of Ireland, Irish mortgage rates saw a slight decrease in February. The average interest rate for new mortgages dropped from 2.93% in January to 2.92% in February. Ireland continues to have the third lowest mortgage rates in the eurozone and is one of the few countries to experience a decrease. In contrast, the eurozone average increased to 3.33%, almost triple its rate 18 months ago. Analysts believe that Irish banks have been slow to pass on European Central Bank rate increases to mortgage customers. As a result, savers are subsidizing mortgage holders, and the country’s meager savings rates remain unchanged. The best savings rate is currently 1.5% with Permanent TSB, while Bank of Ireland offers a maximum of 0.75%. However, deposit rates over 3% are available throughout Europe. The impact of this subsidy varies depending on whether you talk to a mortgage holder or someone with significant savings.


Overall, it is clear that Irish mortgage rates are currently among the cheapest in the euro zone. The surprising drop in February has only served to enhance this position further. While some may speculate that this drop may not be sustainable over the long-term, it is clear that it has made it easier for buyers to secure affordable housing in Ireland. It will be interesting to see what the future holds for mortgage rates in Ireland, but for now, prospective buyers can take comfort in the affordability of Irish mortgages.