Irish mortgage interest rates remain nearly double the euro area average, according to data published by the Central Bank on Friday.
The weighted average interest rate on new mortgages, excluding renegotiations, was 3.38 per cent in November, down 28 basis points year-on-year. The equivalent euro area rate was 1.72 per cent.
Mortgage interest rates in Ireland used to reflect the main European Central Bank (ECB) lending rate, primarily because of the high proportion of tracker mortgages issued during the boom years.
The more recent divergence reflects the premium Irish banks have attached to variable rate mortgages issued since the start of the financial crisis.
Lenders here have resisted political pressure to lower their rates, insisting that lending into to Irish market represents a riskier proposition.
They also argue that Irish costs remain higher because of the higher funding costs they face as a result of the crisis.
Variable rates can rise or fall depending on wholesale interest rates, which are set by the ECB, though banks are not obliged to pass these changes on to customers.
Fianna Fáil is pushing for legislation that would give the Central Bank powers to cap variable mortgage rates, a move that is being resisted by the Central Bank and the Government.
The latest Central Bank data also show the volume of new mortgage agreements amounted to €548 million in November, bringing new agreements to €4.9 billion over the past 12 months.
New variable rate mortgages, which stood at 3.38 per cent in November, accounted for two-thirds of all new agreements over the past year. The equivalent euro area share of variable rate mortgages is less than one quarter.
