Irish average new mortgage rates fell below those across the wider euro zone in October for the first time since the Central Bank started compiling comparative figures in 2017.
The Central Bank said that the average interest rate on new Irish home loans dipped by 0.01 of a percentage point on the month to 2.57 per cent in October, during a period in which the average rate across the euro zone rose by quarter of a point to 2.65 per cent.
Irish banks have lagged many European peers in raising interest rates as the European Central Bank (ECB) hiked its main lending rate from zero to 2 per cent since July, as they are more reliant on deposit funding for their mortgage portfolios than market based finance. Irish nonbank lenders have been hit by a spike in wholesale funding rates this year and have had to increase rates more aggressively than the traditional banks.
The banks have also received an income boost as the ECB switched from charging them negative rates of minus 0.5 per cent on money deposited with the ECB by the banks to paying them a rate of 1.5 per cent as the Frankfurt-based organisation increased its main rates.
‘I feel Irish Rail are just running down the time and hoping I will go away’
‘It’s been 120 days and counting and Aer Lingus still hasn’t refunded me $1,953 for my cancelled flight’
‘I ordered an iPhone off Refurbed for over €700 and have experienced an endless stream of problems’
My health insurer wanted an extra €900 to maintain my plan. Time to look for options
The ECB is widely expected to add a further half point to its main rates when its governing council meets on Thursday.
