The Central Bank of Ireland recently released the interest rates being charged in August 2020. The figures reveal a continuing wide gap between Irish and Eurozone mortgage holders.
Irish consumers are paying 2.83% compared to a figure of 1.35% on average in the rest of the Eurozone.
The problem seems to be the lack of competition in the Irish mortgage market.
The impact of the Covid-19 pandemic is evident in the Central Bank figures with new mortgage agreements down by 38% in August compared to August 2019.
The pandemic has impacted many areas of the market, including the fact that lenders have become more risk averse. However demand for mortgages remains strong and will likely continue because there is huge pent-up demand for people seeking to put a roof over their heads.
The differential of 1.48% more that Irish mortgage holder’s pay compared to the Eurozone average is costing Irish consumers €80,481.60 over 30 years on a €300,000 mortgage.
(See chart below for further detail on mortgage loans and the impact of the differentials).
Sadly, Irish consumers may have to wait until they can access mortgages across EU borders before we’re likely to see strong competition.
In the short-term the best advice we can offer consumers is to shop around and not be afraid to switch lenders.
Your mortgage is likely to be your steepest financial outlay and there are substantial savings to be achieved by switching.
Some lenders now offer incentives to switch and it is easier now than it was some years ago.
If you need help or information on how much you could save, contact your mortgage broker.
COMPARISONS – MORTGAGE INTEREST RATES – IRELAND V EUROZONE:
| Loan Amount | Term | Rate | Monthly Payment | Annual Payment | Overall Payment | |
| Ireland | € 300,000 | 30 years | 2.83% | €1,237.47 | €14,849.64 | €445,489.20 |
| Euro Area | € 300,000 | 30 years | 1.35% | €1,013.91 | €12,166.92 | €365,007.60 |
| Difference | 0 | 0 | 1.48% | €223.56 | €2,682.72 | €80,481.60 |