New figures from the Central Bank show that the average interest rate
on a new mortgage dipped in February to 2.92% from 2.93% in January.
Ireland once again had the third cheapest mortgage rates in the euro zone in February.
The euro zone average mortgage rate rose to 3.33%, almost three times the rate it was around 18 months ago.
Today’s Central Bank figures show that the total volume of pure new
mortgage agreements amounted to €1.059 billion in February, a 40%
increase on the previous month, and a rise of 69% on an annual basis.
They also reveal that the weighted average interest rate on new fixed
rate mortgages – which make up 93% of the total new mortgage agreements
– was 2.83% in February. This represents an increase of 1 basis point
from January and 23 basis points higher on an annual basis.
Meanwhile, interest rates on household overnight deposits stood at 0.03% in February 2023.
The Central Bank said that interest rates on new household deposits
with agreed maturity rose to 1.02% in February in Ireland. The
equivalent rate in the euro area was 1.92%.
Daragh Cassidy, Head of Communications at mortgage broker bonkers.ie,
said today’s figures show once again how slow the main banks have been
at passing on the ECB rate increases to mortgage customers.
“Since last July, the ECB has hiked rates by 3.5 percentage points.
However the main banks have only hiked their fixed rates by around 1.5
to 2 percentage points on average,” Mr Cassidy noted.
He said that variable rates have hardly moved at all.
But he said that this “generosity” has largely come at the expense of
savers, adding that savings rates in Ireland are still “miserable”.
“In essence, savers are now heavily subsidising mortgage holders.
Whether that’s right will differ vastly depending on whether you talk to
a mortgage holder or someone with big savings,” Mr Cassidy said.
He also said that despite the fall in rates last month, the medium term outlook is for rates to go up.