THERE is little justification for mortgage rates in this country being double the average for the Eurozone, a leading broker body said.
It comes as new figures show that mortgage rates in the State are the second highest in the currency zone.
This is costing the average new home buyer €230 a month more than other borrowers across the euro area.
New Central Bank figures show that the average rate charged on new mortgages here over the past year was 2.91pc.
This is more than double the euro area average of 1.35pc.
This means Ireland had the second most expensive mortgages in the Eurozone in February. Greece tops the league for the most expensive home loans.
Representative group Brokers Ireland said there was little justification for such high rates in this country.
Rachel McGovern of the broker body said: “While Irish rates have come down over recent times, this is still an enormous gap, with little justification for it.”
She calculated that Irish mortgage holders are paying 1.56pc over and above their euro area counterparts.
This is costing them over €236 more every month on a €300,000 mortgage over 30 years.
Over the lifetime of the mortgage this works out at a massive €85,100 in extra costs.
She said there is huge untapped value for consumers who are willing to switch between lenders.
“Not enough people are shopping around. By doing so you can substantially reduce your repayments or force a better rate from your existing lender,” she said.
The Central Bank figures also show the volume of new mortgage agreements amounted to €574m in February, an increase of 4.1pc on the same month last year.
However, the figures for March are expected to be hugely impacted by the economic devastation brought on by the coronavirus.
Ms McGovern said the Covid-19 pandemic can be expected to slow the mortgage market for the near future.
But she added: “None of us knows with any degree of certainty the full impact over the medium to long-term with regard to interest rates.
“What we would say is that people need to consider their decisions very carefully and take advice.”
The Central Bank report shows that more than three quarters of home-buyers in this country are opting for fixed-rate mortgages.
The regulator found that in the three months to February, a record 76pc of all new mortgage loans taken out in the State were on a fixed interest rate.
The number of new buyers opting for fixed rates has jumped sharply in recent years.
Just six years ago around 10pc of mortgages were taken out on a fixed rate.
Low interest rates internationally mean that fixed rates tend to be much better value than variable rates.