Irish Mortgage Rates Hit Two-Year Low, Further Cuts Expected

Irish mortgage rates have declined for the fifth consecutive month, reaching their lowest level since March 2023. The average mortgage rate now stands at 3.60 percent, down from 4.11 percent in June 2024, according to data released by the Central Bank of Ireland. This positive trend comes as the gap between Irish rates and the Eurozone average of 3.29 percent continues to narrow.

The variation in rates across Ireland remains significant. For first-time buyers borrowing €300,000 with a 10 percent deposit, variable rates can range from 3.18 percent to 4.70 percent. Similarly, three-year fixed mortgage rates vary from 3.20 percent to 4.85 percent. Money experts are advising potential homeowners to explore different lenders to secure the best deals.

Daragh Cassidy, Head of Communications at Bonkers.ie, indicated that further rate cuts are likely. He stated, “Mortgage rates are now at their lowest level since March 2023, which is obviously good news for prospective first-time buyers and those looking to switch their mortgage over the coming months.” Cassidy added that the European Central Bank (ECB) may implement additional cuts before the end of the year, which could lead to a slight decrease in mortgage rates.

Despite the average rate, Cassidy emphasized the importance of understanding that 3.60 percent is merely an average. “There are 10 lenders in the Irish mortgage market at present, and there’s a wide variation in rates across them all,” he noted. Different lenders often offer various cashback deals and incentives, which can influence the overall cost of borrowing.

For instance, first-time buyers can find a variable rate as low as 3.18 percent through Avant Money’s new tracker-like mortgage product. In contrast, AIB offers a rate of 4.15 percent. For a borrower securing €300,000 over 30 years, this discrepancy equates to a difference of over €164 per month, resulting in almost €2,000 in additional payments over just one year.

Those purchasing new-build properties also need to conduct thorough research. Cassidy pointed out that buyers could secure a three-year fixed rate of 3.20 percent with AIB, while choosing Núa Money could lead to a significantly higher rate of 4.85 percent. The monthly payment difference could exceed €285, amounting to nearly €10,300 over three years.

Cassidy stressed the value of consulting with a qualified mortgage broker. He encouraged potential buyers to remember that they do not need to have an existing account with a lender to apply for a mortgage, suggesting they should not limit their options to familiar providers.

As mortgage rates in Ireland continue to trend downwards, potential buyers are urged to take advantage of the current market conditions and explore various lending options to find the most favorable rates.