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Ireland back to the top of mortgage league of shame


Ireland has the most expensive new mortgages in the Eurozone. Stock image

Ireland has the most expensive new mortgages in the Eurozone. Stock image

Daragh Cassidy

Daragh Cassidy


Ireland has the most expensive new mortgages in the Eurozone. Stock image

IRELAND has climbed back to the top of the table for having the most expensive mortgage rates in the Eurozone.

The rate here for new mortgages is twice the average in the currency bloc, despite a sharp fall in rates here the last year, according to Central Bank figures.

Rates have fallen by almost 1 percentage point as non-bank rivals to the banks, including Avant Money, Finance Ireland and ICS, have been offering better value.

Avant Money and ICS Mortgages now both offer rates from as low as 1.95pc.

But main lenders AIB, Bank of Ireland and Permanent have mainly failed to respond.

The market is also set to be hit by the planned departures of Ulster Bank and KBC Bank.

At 2.73pc, the average interest rate on new Irish mortgages is the highest in the 19-country Eurozone.

Ireland is followed by Greece at 2.58pc and Latvia at 2.54pc.

Finland has the lowest average rate in the Eurozone at just 0.71pc, closely followed by Portugal at 0.80pc. The Eurozone average is 1.28pc.

The rates here mean an average first-time buyer, borrowing €250,000 over 30 years, is paying €180 extra a month compared to our European neighbours.

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This works out at almost €2,200 a year, according to calculations by Daragh Cassidy of price comparison site Bonkers.ie.

Banks argue that the legacy of the financial collapse more than 12 years ago means regulators require them to put aside three times more capital when they issue a mortgage compared with their Eurozone counterparts.

Banks also say they have difficulty enforcing security if a loan goes into arrears.

Mr Cassidy said: “The fall in mortgage rates over the past year is obviously welcome and the overall trend does appear to be downward, albeit very, very slowly.

“However, it’s still deeply frustrating that rates here remain so high compared to our Eurozone neighbours and have done so for so long.”

He said that in recent months ICS mortgages, EBS, Finance Ireland and Avant Money all reduced rates.

But this is not feeding through to the average rate consumers are being charged just yet.

This is partly because many of the lowest rates in Ireland come with caveats, such as the requirement to have a 40pc deposit.

Other good rates are reserved for B+ energy rated homes

He said AIB, Bank of Ireland, and Permanent TSB have around 70pc of the mortgage market between them but charge the highest rates.

Recent independent research conducted by Red C on behalf of bonkers.ie revealed strong support among Irish people for a toughening of the rules around home repossessions to bring Ireland closer into line with European norms if it also meant mortgage holders could avail of lower rates.

Existing homeowners who switch can make huge savings, Mr Cassidy said.

In many cases banks will provide a sizeable cashback incentive to those who switch or a contribution towards the legal fees.

A family with €250,000 outstanding on their mortgage, with 20 years remaining, and are paying an interest rate of 4pc or above, can save over €220 a month on your repayments.

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