CB says Irish mortgage rates far higher than EU average

Delboy

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Irish mortgages remain far more expensive than EU average
Central Bank says average Irish mortgage rate is 3.49% compared with 1.82% across EU
http://www.irishtimes.com/business/...-far-more-expensive-than-eu-average-1.2785503
According to the regulator the rate on all new variable rate mortgages was 3.11 per cent in July 2016.
While this has fallen by 23 basis points over the past twelve months, it is still far higher than the equivalent euro rate of just 1.82 per cent.
When the impact of renegotiated mortgages is excluded, the average rate on new mortgages is considerably higher at 3.49 per cent in July, although this is also falling, down by 28 basis points in the year.
Standard variable rate mortgages, which can be as high as 4.5 per cent at [broken link removed] for example, decreased the most, falling by 53 basis points.
Fixed rate mortgages over one to three years declined by 26 basis points. Fixed rate mortgages accounted for just over 40 per cent of all new mortgages taken out on a family home in the second quarter.
 
Bank of Ireland appear to the highest, when are they are to reduce, why is nothing been done??
 
Central Bank says average Irish mortgage rate is 3.49% compared with 1.82% across EU

To be accurate, the Central Bank has not said the average Irish mortgage rate is 3.49% compared with 1.82% across EU (and the IT has not reported them as having said so).

Average variable mortgage rates on all outstanding variable rate home loans in Ireland, including trackers, are actually broadly in-line with the euro zone average - I've no idea what the position is across the EU as a whole.

The rate on all new floating rate loan agreements for house purchase (including renegotiations) was 3.11% in July 2016, corresponding to a 23 basis point decline over the past twelve months. The equivalent euro zone rate was 1.82%.

Excluding renegotiations (largely switchers, borrower availing of tracker mover products or fixing for up to one year) increases the average new lending rate from 3.11% to 3.49%. We don't know the equivalent euro zone rate but it's almost certainly higher than 1.82%.

There is no doubt that new lending rates are way higher than the euro zone average - there really is no need to exaggerate the difference. This is largely because of the fact that the level of non-performing loans in Ireland is almost three times higher than the euro zone average. If we want to see rates fall, then resolving these NPLs expeditiously should be the primary area of focus, while doing everything possible to encourage new entrants to our mortgage market.
 
Bank of Ireland appear to the highest, when are they are to reduce, why is nothing been done??
Closely followed by Permanent TSB I'd say. Still waiting here. Time ticks on - still being fleeced.

Might be time to get writing to the Minister for Finance again.
 
why is nothing been done??
Because the state doesn't want to be in the home loan business forever, a (regulated) competitive free market seems like the best solution to high prices.

Prices are unusually high, so where is the flood of new/foreign banks looking to get into this goldmine?

People tend not to invest into a regulatory environment which makes a healthy profit unlikely. If I'm a dutch banker, why would I consider competing in an Irish market where my prices will be capped by government fiat and where I'll never be allowed to reposses on a non-performing loan?
Why would I enter into a situation where a government can squeeze me to death, to please it's electorate with (temporary) lower mortgage rates?
 
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