Saturday 17 August 2019

Mortgage rates here mean homeowners pay €60,000 more than Europe over life of loan

 

'The interest rate on all new mortgages averaged 3.01pc in May, down two basis points on the previous month' (stock photo)
'The interest rate on all new mortgages averaged 3.01pc in May, down two basis points on the previous month' (stock photo)
Charlie Weston

Charlie Weston

High mortgage rates in this country are costing borrowers up to €60,000.

Data from the Central Bank shows the average interest rate on new mortgages fell marginally in May - but Irish rates are still the second highest in the eurozone.

The interest rate on all new mortgages averaged 3.01pc in May, down two basis points on the previous month.

The average rate in the euro area is 1.68pc.

For a family with a €300,000 mortgage, the difference in rates means extra payments of €60,000 over the 25-year life of the loan.

Chief executive of Brokers Ireland Diarmuid Kelly said this meant the monthly mortgage re-payment would be €200 more a month in Ireland than that of the same loan in the eurozone.

Only Greece has more expensive mortgages.

Daragh Cassidy, of price comparison site Bonkers.ie, said the slight fall in mortgage rates was welcome but it wasn't enough.

"We continue to pay far higher rates than almost every other country in the eurozone and have done for years. These higher-than-average rates, coupled with the continued rise in house prices, put added pressure on affordability for first-time buyers," he said.

There was a lack of competition in the market as it was heavily concentrated in the hands of AIB and Bank of Ireland, he added.

Irish Independent

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