Mortgage Rates Ireland

An overview of mortgage rates in Ireland and amounts borrowed - as at end of March 2012.

Mortgage lending in Ireland declined by 2.4 per cent at end-March 2012, following a quarterly decline of 0.6 per cent.
The total outstanding amount of mortgage loans in Ireland is €79.9 billion.

Variable rate mortgages make up 87% of all outstanding mortgage amounts (this include trackers and those with a fixed rate up to one year )- at end-March 2012.

Tracker mortgages by themselves accounted for 49 per cent of outstanding loans .Fixed rate mortgages accounted for the other 13% cent of the outstanding mortgages. Mortgages over one year and up to three years rate fixation accounted for 52 per cent of fixed rate mortgages outstanding, while mortgages over five years rate fixation accounted for just 11 per cent.

Loans for houses that are occupied by the owner accounted for 74 per cent of loans.
The outstanding mortgages on buy-to-let properties was €19.4 billion at end-March 2012, accounting for 24 % of all mortgages. The split on buy to let was 37 per cent standard variable, 63 per cent tracker.

See the latest Mortgage Rates in Ireland

Some good news for most Irish mortgage payers - the ECB has cut interest rates again and they are now down from 1.25% to 1% - which is back to the all time low.

See the list of lowest mortgage rates in Ireland here

After the ECB rate cut to 1.25% - which takes effect today (Nov 9th 2011) - all tracker mortgage rates will be cut by 0.25%. For those borrowers on variable rates - a reduction in their rate is not guaranteed. Each lender sets their variable rates independently - and are not tied to teh the ECB rate . (although many seem to increase rates when the ECB raise their rate).

Some banks have not increased rates in recent months - and so might not drop them now. See the latest list of Variable Mortgages in Ireland here .

The press are announcing the ECB interest rates increase as if it will mean thousands of Irish mortgage payers having to default on their mortgages. This 0.25% increase to 1.25% - is the first increase since 2006.
People on tracker mortgages have been paying rates as low as 1.5% since May 2009.
Someone who bought a house with a small deposit in June 2007 - when the ECB rate was 4% - could have got a tracker mortgage of ECB plus 0.75% - that was a rate of 4.75%. If the lenders did the stress test as they were supposed to - and if the borrower didn’t make up ficticous lodgers - they should have been able to proove thay could afford the mortgage if the rate went up by 2% - ie 6.75% .

On a Mortgage of 300,000 Euro - the initial repayments at 4.75% would have been €1710 a month. After mortgage tax relief - this would be €1422

That tracker mortgage rate has dropped from 4.75% to 1.75% since May 2009 The repayments are now €1235 (about €1145 after tax relief) . This is a drop of about a drop of €187 a month . There were gradual drops in the rate since October 2008 - so the total reduction in repayments is more than that.
Hopefully - those homeowners in that position have either been saving the extra money or have been overpaying the mortgage and reducing the size of the loan.
For those people who have lost their job - it is a different story - but anyone who has kept their job has been better off in terms of mortgage payments for the past two and a half years.

It will probably be another couple of years before the ECB rate rises back up to 4% again (if it ever does).

History of ECB Rates Since 2003

With the Irish Independent putting out headlines like “Mortgage Hike Shock” - some people may be thinking of moving their mortgage to another lender - especially PTSB mortgage holders.
If PTSB do raise their variable rate by 0.5% as predicted - they say the “average” rise in repayments for PTSB variable rate mortgage holders will only be €15 a month - because the avergage outstanding mortgage is just €62,000.
The mortgage broker industry is urging people to go on to a fixed rate mortgage - but of course they may be slightly influenced by the possibility of increased work for themselves if people switch lenders.
Switching your mortgage lender will involve legal fees and valuation fees of anything between €600 and €1500 - depending on the solicitor you use. The legal work involved is not as much as buying a house - but it still has to be done properly.
If you still owe more than 90% of the value of your house - it is unlikely that any lender will want to take on your mortgage .
Switching to another lender’s variable rate is probably not worth the costs involved because other lenders may well put up rates soon too.
Switching to a fixed rate will save you money if it is lower than your variable rate. Switching to a fixed rate that is higher than your current rate is more of a gamble and it may or may not pay off. There are still fixed rates on offer as low as 2.8% (AIB) and 2.99% (BOI) for switchers. But these rates are only for 2 years - and the savings you make may not even cover the legal fees if your mortgage is not very large.
See the Lowest Mortgage Rates here.

For example a 250k loan over 25 years at 3.69% would mean repayments of €1278 a month. Switching to a 2 year fixed rate of 2.99% would reduce the repayments to €1185 - a saving of just €93 a month. (If variable rates rise again during the 2 years your savings would of course be greater.) So you would save a minimum of €2232 over the 2 years on repayments - but the switching costs could use up around €1000 of this. It is worth considering though.

A 100k mortgage would mean reductions in repayments of just €37 a month (€888 total) - so it may not be worth switching lenders for those type of savings - unless just as a protest.

Of course - variable rates could come down during the next 2 years - but that is not looking likely in the short to medium term.

NB: Bank of Ireland are still offering to pay up to €750 towards legal fees for switchers - but this offer is due to end soon

Mortgage Rates Ireland

Mortgage rates for many homeowners in Ireland will be falling again in May after the ECB announced a further cut from 1.25% to 1%.
The drop is effective from May 13th 2009. All tracker mortgages will be reduced - lenders have 30 days to do so usually. Variable rates may or may not fall in line with this latest cut. Keep an eye on the best mortgage rates here .

A cut in the ECB interest rate from 1.5% to 1.25 was announced today. The cuts are coming so fast - that some lenders have yet to pass on the last ECB cut.
It is less likely that all lenders will pass on this cut to variable mortgages.
Keep checking on the Best Mortgage Rates to see if your lender is giving you a good rate - or is it time to switch your mortgage?

As expected again - the ECB has cut interest rates from 2% to 1.5% today.
This cut will be passed on to all tracker mortgages and should result in a reduction of about 26 euro a month for each 100k borrowed.
Variable rates may not drop by 0.5% (Ulster and First Active are not passing it on to variable rates). AIB and Halifax have confirmed they will be cutting variable rates by 0.5%.
With variable mortgage rates now going as low as 2.75% - it would be a good idea for Ulster or First Active mortgage holders to look into switching to another provider.

There is still time to get a tracker mortgage in Ireland - but the rate is ECB plus 1.75% which is currently 5.5%. Bank of Scotland (Ireland) are still advertising this tracker mortgage - but said on October 22nd that it would be withdrawn for new customers in the next 2 weeks. So - if you want the last tracker move fast. With ECB rates cut today by 0.5% - the rate (if they don’t withdraw them) will now be 5%. There are variable rates this low around - but with the tracker you are guaranteed to get the benefit of further ECB rate cuts.
I wouldn’t be surprised if BOS withdraw the tracker today.

As expected - Halifax and Bank of Scotland (Ireland) are the latest lenders in Ireland to stop offering tracker mortgages to new customers . Now all Irish lenders have stopped offering new tracker mortgages apart from the Leeds Building Society - but their rate of ecb plus 2.2% will not get many takers.

Tracker Mortgages in Ireland: RIP . It was good while it lasted - but maybe the banks wish they had never offered them in the first place.

Well - it didn’t take long for NIB to fall in line with all the other lenders. NIB have stopped offering tracker mortgages for new customers as of today.
It will make it a lot easier to keep track of all the various mortgage rates out there.
Only Halifax , Bank of Scotland and Leeds Building Society are offering tracker mortgages. The Leeds tracker is only available through brokers and is ECB plus 2.2% - (5.95%) - which does not look too attractive.

Recent days have seen almost all mortgage lenders in Ireland withdraw tracker mortgages for new customers. EBS is the latest Irish lender to announce that they are no longer doing tracker mortgages. he broker arm of EBS - Haven - is also doing the same
Looks like NIB and Halifax are the the only places to get a tracker mortgage in Ireland now. But it may only be a matter of days before they too drop them.