There has been a slight increase in the average interest rate charged on new mortgages issued in August despite falling rates elsewhere in the Eurozone, according to the latest figures from the Central Bank.
At 2.99%, the rate is up from 2.98% in July. Meanwhile average rates in the Eurozone fell by 0.06% to a new series low of 1.48%.
Recent figures from the Banking and Payments Federation Ireland show that the average first-time buyer mortgage in Ireland is around €225,000. This means a first-time buyer in Ireland who takes out a mortgage of this size over 30 years is paying on average over €173 more each month or almost €2,100 a year.
The Irish rate is down only two basis points since the start of the year, compared to over 30 basis points in the Eurozone and many advertised rates not available to the average buyer.
Price comparison and consumer website, bonkers.ie say Irish consumers are being hit with double-whammy of higher-than-average mortgage rates and lower-than-average savings rates.
Commenting on the figures, Head of Communications at bonkers.ie, Daragh Cassidy said, "There is still a lack of competition in the Irish mortgage market as it remains heavily concentrated in the hands of a few main banks; namely AIB and Bank of Ireland, who have a duopoly-like grip on the market. And although competition has improved in recent times, it's still below where it needs to be and this is leading to higher rates. The issue around home repossessions, and the inability of banks to take back a loan that has gone bad, is also a factor."
He concluded, "You can’t help but feel Irish consumers are being shafted. As well as having to contend with some of the highest mortgage rates in the Eurozone, we’re also being hit with some of the lowest saving rates."