Wednesday 14 November 2018

Homeowners crippled by highest rates in eurozone

Fianna Fáil’s finance spokesman Michael McGrath. Photo: Tom Burke
Fianna Fáil’s finance spokesman Michael McGrath. Photo: Tom Burke
Charlie Weston

Charlie Weston

Homebuyers are paying thousands of euro more a year for their loans than people on the continent.

This is because mortgage rates here continue to be the highest in the eurozone.

New figures from the Central Bank confirm people drawing down a new mortgage are being charged an average of 3.21pc.The average for the euro area is 1.8pc.

This means borrowers here are paying €220 more a month than the eurozone average on a €300,000 mortgage over 30 years. Over a year this works out at €2,640.

In a bulletin, the Central Bank admitted: "Ireland continued to have the highest average interest rate across the euro area on all new mortgages agreed in May, at 3.21pc.

"The rate varied considerably across countries, with the average for the euro area being 1.80pc."

Ireland is the only country with an average rate which is above 3pc.

Some 10 of the 19 eurozone countries report an average rate on new mortgages in May of less than 2pc.

Fianna Fáil finance spokesman Michael McGrath described the rates here as a rip-off.

"Mortgage interest rates charged in Ireland are entirely unjustifiable and the banks cannot be allowed to continue to fleece Irish consumers in this way."

He said the massive differential in interest rates is impacting negatively on the quality of life for hundreds of thousands of individuals and families around the country.

Mr McGrath accused the Government and the Central Bank of showing no interest in the issue.

"Both seem happy to allow Irish mortgage holders and SMEs pay for the most expensive debt in Europe," he said.

The high cost of borrowing comes at a time when banks are paying just 0.06pc on average on new household deposits.

The figures show that fixed rate mortgages accounted for 54pc of new loans over the three months to May.

This compared with 80pc of new agreements over the same period in the eurozone.

Irish Independent

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