Mortgage rates fall to lowest in nearly three years as ‘wide variance’ in offerings noted

The average interest rate on a new mortgage fell slightly in November to the lowest figure in nearly three years, according to new data released by the Central Bank of Ireland.

The data indicates that the weighted average interest rate on new mortgages in Ireland stood at 3.53 per cent in November, down from 3.56 per cent in October. Rates remain significantly lower than in September of last year.

The equivalent euro zone average rate was 3.33 per cent, the regulator said, making Ireland the sixth most expensive country for home loans in the bloc.

The difference between the average mortgage rate in Ireland and the euro zone average, however, is the smallest since December 2023.

This comes after ICS Mortgages said last week it was raising its fixed home loan rates by as much as 0.45 of a percentage point, stoking fears this could be the beginning of a fresh wave of hikes for Irish homeowners.

The move follows an increase in its market funding costs in recent months as financial markets price in the prospect of the next rates move from the European Central Bank (ECB) being upward.

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The vast majority, some 89 per cent, of newly agreed mortgages in November were fixed-rate mortgages, which had an average rate of 3.46 per cent – a decrease of 33 basis points from the previous November.

The total volume of mortgages agreed in the month decreased to €1.1 billion against the previous month, but represented an increase of 6 per cent on the previous year.

Aisling McNamara, the mortgage sales director of broker Mortgage123, said rates have “settled into a holding pattern”.

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“Rates are still easing, but the pace of change has slowed,” she said, but noted that lenders are “moving in very different directions”, referencing ICS Mortgages’ rate hike against other players that are cutting rates.

Daragh Cassidy of mortgage comparison site Bonkers said it is “unlikely mortgage rates will change much over the coming months” but that the expected entry of Revolut into the Irish mortgage market “could push rates down a bit” depending on how competitive it is.

He said there is “wide variation” in market offerings and a “big difference” between lenders such as Avant Money and mortgages from familiar names like AIB and PTSB on variable rate mortgages.

“It’s similar for fixed rates,” he said, “So I’d really encourage consumers to compare the market and shop around when applying for a mortgage, either as a first-time buyer or switcher.”