Ireland now has third lowest new mortgage rates in euro zone

www.irishtimes.com

Irish new mortgage rates among lowest in Europe as banks slow to pass on ECB rate hikes

Weighted average new mortgage rate is unchanged from November
www.irishtimes.com www.irishtimes.com

The latest industry data from Banking & Payments Federation Ireland showed that switching and mortgage top-ups activity accounted for about a third of the total of €1.46 billion of home loans approved in the State in October.
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Holy moly! That's a lot of switching and/or top-ups.

It comes from this report, which has an interesting footnote:
Note: From July 2022, re-mortgage/switching and top-up segments are merged into the non-purchase segment to prevent disclosure of confidential lender data.
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But based on the Q2 2022 report, we might assume that 80% of the "non-purchase" mortgages were mortgage switches. (The other ~20% were top-ups.) That means that about 27% (by count) of all new mortgages in Q3 2022 were switcher mortgages. And that doesn't even include people re-fixing with their current lender.
 
Here is the latest for December. Third-lowest in the euro area.

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Last edited by a moderator:
NoRegretsCoyote said:
Here is the latest for December. Third-lowest in the euro area.

View attachment 7235
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On the flip side, deposit rates are amongst the lowest in the EU. Irish banks are getting away without raising deposit rates much whilst increasing mortgage rates albeit not as much as other EU banks.

The CBI said:
"Interest rates on household overnight deposits stood at
0.03 per cent in December 2022 (Chart 4). Interest rates
on new household deposits with agreed maturity rose to
0.63 per cent in December in Ireland. The equivalent rate
in the euro area was 1.44 per cent. "

Less than 1% of household deposits are in term deposit products, so 99% of Irish deposits are earning an average of 0.03% when the ECB deposit rate is 2.50%. Irish banks are getting away with murder with deposit rates.
 
Lightning said:
On the flip side, deposit rates are amongst the lowest in the EU. Irish banks are getting away without raising deposit rates much whilst increasing mortgage rates albeit not as much as other EU banks.
Click to expand...
Yup, it feels like the mainstream lenders have used the ECB rate increases as cover to increase mortgage rates, even though their mortgage lending is mostly funded by cheap deposits (which became a source of revenue again once the ECB started increasing its deposit rate).
 
www.rte.ie

Interest rate on new mortgages hits 2.69% in December

The average interest rate on new mortgages rose by 0.12% in December to 2.69%, according to new figures from the Central Bank.
www.rte.ie www.rte.ie
The average interest rate on new mortgages rose by 0.12% in December to 2.69%, according to new figures from the Central Bank.

...

The average rate on new mortgages across the euro area was 2.95%. This means Ireland remained the third cheapest market for new mortgages after France and Malta.
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Lightning said:
On the flip side, deposit rates are amongst the lowest in the EU. Irish banks are getting away without raising deposit rates much whilst increasing mortgage rates albeit not as much as other EU banks.

The CBI said:
"Interest rates on household overnight deposits stood at
0.03 per cent in December 2022 (Chart 4). Interest rates
on new household deposits with agreed maturity rose to
0.63 per cent in December in Ireland. The equivalent rate
in the euro area was 1.44 per cent. "

Less than 1% of household deposits are in term deposit products, so 99% of Irish deposits are earning an average of 0.03% when the ECB deposit rate is 2.50%. Irish banks are getting away with murder with deposit rates.
Click to expand...
Much rather the Irish market keeps lower mortgage rates, and lower deposit rates. You can easily deposit money with another EU lender to avail of higher deposit rates (Bunq, Raisin etc). You can't easily take a mortgage from another EU lender.
 
ClubMan said:
Doesn't look like it from the quarterly repossession numbers from the CB.

Previous Statistical Releases for Mortgage Arrears | Central Bank of Ireland

Mortgage Arrears Archive
www.centralbank.ie www.centralbank.ie
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So what then is the driver of the lower rates now compared to the rest of the EU?

For years we were told that higher interest rates here compared to the rest of the EU were because of higher default rates here and the difficulty and cost involved in repossessing properties.
 
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