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People pay less for mortgages in July

Friday, September 14 11:56:21

Interest rates on outstanding loans to households for house purchases were 12 basis points lower at end-July 2012, relative to the previous month and 0.47pc lower than a year previously, latest Central Bank figures show.

The weighted average interest rate on outstanding mortgage loans with an original maturity over five years (which accounted for 99 per cent of outstanding mortgage loans) was 2.86 per cent in July 2012. This was 47 basis points below the rate reported at end-July 2011.

The corresponding rate reported by all credit institutions resident in the euro area was higher, at 3.72 per cent at end-July 2012, having fallen by 4 basis points since end-June 2012 and 18 basis points since end-July 2011.

Developments in average outstanding mortgage interest rates in Ireland have broadly reflected the changes to the ECB main refinancing rate in recent years to a greater extent than in the euro area as a whole, due to the relatively higher proportion of 'tracker' and other variable rate mortgage products in the Irish market.

Interest rates on outstanding loans to households for consumption and other purposes were slightly lower at end-July, averaging 5.79 per cent compared with the previous month.

The interest rate on short-term loans for consumption and other purposes with an agreed maturity up to one year, which includes both overdrafts and credit card debt, remained unchanged over the month at 8.95 per cent. The equivalent rate reported by all credit institutions in the euro area was lower, at 7.78 per cent.

Meanwhile, the weighted average rate reported by Irish resident credit institutions on longer-term loans with an original maturity over five years was 4 per cent at end-July, 11 basis points lower on a month-to-month basis. There was a rate of 5.08 per cent reported by all euro area credit institutions for loans in this category at end-July 2012.