Sunday 18 March 2018

Mortgage holders here pay €250 more than EU average each month

(Stock picture)
(Stock picture)
Colm Kelpie

Colm Kelpie

The volume of new mortgages taken out in the year to June was up by a quarter on the same period last year, data shows.

But the average interest rate on new variable rate mortgages here remains high compared with other eurozone countries.

It stands at almost twice that of the eurozone average, according to the information from the Central Bank.

The number of new mortgages in June amounted to €562m, bringing new mortgage deals to €5.6bn in the previous 12 months. That compares with new mortgage agreements of €4.5bn in the 12 months to June 2016. The weighted average interest rate on new variable rate mortgage agreements, excluding restructured mortgages, stood at 3.35pc in June.

The rate on all new agreements, fixed and variable, stood at 3.3pc. The equivalent eurozone rate was 1.83pc.

Fianna Fáil finance spokesman Michael McGrath said mortgage rates in Ireland remain dramatically out of line with rates charged elsewhere in Europe.

"Despite modest reductions in mortgage rates, Irish mortgage holders are continuing to pay dramatically more than consumers elsewhere in Europe," Mr McGrath said.

"For example, the interest rate on all new mortgages, fixed and variable, stood at 3.3pc in June compared to a euro area rate of 1.83pc. This means that a borrower with a mortgage of €200,000 is paying €250 per month more than they would be paying in the average euro area country.

"That is €250 a month, each and every month. There has yet to be a credible explanation for such a dramatic difference in the rates charges."

Although the share of fixed rate mortgages is increasing, variable rate mortgages accounted for 60pc of all new agreements over the past year. The equivalent eurozone share is 15pc.

Irish Independent

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