Three houses made of bank euro bills standing in a row isolated on white background

Mortgage rates fall but warning of rises on the way.


MORTGAGE rates in this country have bucked the trend by falling in April, but homeowners have been warned that the next moves are likely to be upwards.

New figures show that the average rates for new buyers and switchers fell marginally to 2.77pc in April. This is down fractionally from 2.78pc in March.

The average interest rate on new fixed rate mortgage agreements, which account for the majority of all new agreements, was 2.59pc in April. This is a decrease of 4 basis points on April 2021 and down 1 basis point on the previous month.

This country has the second highest mortgage rates in the Eurozone, according to the Central Bank of Ireland. The average interest rate on a new mortgage in Ireland is second only to Greece in the 19-country Eurozone. And mortgage holders were warned that the European Central Bank is likely to signal at a meeting of its governing council on Thursday that it is about to reverse a decade-long policy and start raising its key lending rate.

Some 450,000 of homeowners are still on a combination of variable and tracker rates, which will rise when the ECB starts raising its key re-financing rate. The ECB is expected to announce on Thursday that its asset purchases will end in June, and signal that a rise in its deposit rate is likely to be announced at its July meeting.

It is possible the ECB will raise the re-finance rate in tandem with the deposit rate, according to Davy Stockbrokers economist Conall MacCoille.

A higher refinance rate will make trackers immediately more expensive.

The fact that variable rates here are so high, with overall new mortgage rates almost twice the European average, could mean Irish lenders will hold back on hiking variable rates if the ECB refinance rate rises, according to Daragh Cassidy of Each 0.25pc rise in the ECB rates will cost €30 more in monthly repayments for a €250,000 tracker mortgage.

Future fixed rates will also rise if the ECB main refinancing rate goes up. Some banking experts expect ECB deposit and refinancing rates to increase multiple times in the next year.

The gap between the average new mortgage rate in this country and the average in the Eurozone means it around €1,900 to service a home-loan in Ireland than the average for the 19-country Eurozone. This is despite the fact that Ireland was one of only two countries, with the other Malta, to see a fall in its mortgage rates in April. All other countries saw a rise in their average rate, Central Bank figures show. The Eurozone average is 1.59pc, its highest level in almost three years and up from 1.46pc in March, and 1.26% in April of last year.

By contrast, the average Irish mortgage rate has fallen by 0.3pc compared to April last year. There has been mixed news on mortgage rates recently. Permanent TSB, Bank of Ireland and EBS all recently reduced some of their rates. But ICS Mortgages increased its rates twice over the past few weeks, and Avant Money increased some of its rates last month.

Mr Cassidy, Head of Communications at said that it was only a matter of weeks before the ECB starts announcing rate rises to counter the fact that inflation in the Eurozone was 8.1pc in May.

“However, Irish mortgage rates are so out of kilter with the ECB base rate that we could see a small increase in the ECB rate not being passed on to consumers.”

Mr Cassidy said any decision on variable rates will depend on the competitive pressures the banks feel under. But tracker customers are likely to see an almost immediate increase in their rates, he said.

Non-bank lenders, which rely almost entirely on wholesale markets for raising funds will be under the most pressure to raise rates, he added.


Whether you are  looking to switch lender currently, a first time buyer or  moving home, should you have any concerns about the issues raised in this article,  or investing in a buy-to-let property, why not chat to a Seaspray Mortgage adviser today about finding the mortgage that’s right for you:

tel.+353 83 099 0442     or email


Seaspray Financial Services Ltd trading as Seaspray Mortgages is regulated by the Central Bank of Ireland with registered number C165527


This content is taken from a previous article published by on 08-06-22,written by Charlie Weston (


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