Interest Rates – Optimism For Existing Mortgage Holders But Rising Prices A Worry For First-Time Buyers – Brokers Ireland

Press Release

12^th February 2025

Responding to today’s Central Bank Retail Interest Rates publication for December showing Ireland’s weighted average interest rate on new mortgage agreements in December at 3.80%, down 17 basis points in a month, Brokers Ireland said while mortgage interest rates are on a continuing downward trajectory the phenomenon is seeing lenders move to cut already weak deposit interest rates with the overnight deposit rate at just 0.13%.

Rachel McGovern, Brokers Ireland Deputy Chief Executive said: “All indications are that this year will result in further substantial savings for mortgage holders, given the direction the ECB has been going in and recent public statements giving further cause for optimism.”

And she said competition among lenders is beginning to show its hand.

“Unfortunately the same cannot be said for savers, especially those keeping their money in overnight deposit accounts.”

Brokers Ireland has called for better mortgage products, such as a return to good, genuinely long-term fixed interest rates, akin to those of other jurisdictions, rather than the three to five year fixes that have dominated the Irish market.

“The way the market is going we may well see mortgages going in that direction again,” she said.

“There is really no good reason why not. Such products give certainty and stability all round, not just for consumers but for lenders too.”

She said mortgages, by their nature, are long-term products and in other countries such as the US it is the norm to have a fixed rate for the entire term of the mortgage.

She said a concern for first-time buyers now is the escalating price of homes.

“The increases are at unsustainable levels and we really need to see supply ramped up”.

In this regard it was to be welcomed that the Government has indicated that it plans to seriously review current housing policy. “It cannot happen quickly enough,” she said.

Ends

Note: Brokers Ireland operates the ‘Future Financial Experts’ Transition Year programme aimed at communicating good financial skills to students and creating awareness around financial concepts.

Further information:  Rachel McGovern, Deputy Chief Executive, Brokers Ireland          Tel.086-8259938

Mairéad Foley, Foley Ryan Communications                                                                      Tel. 086-2556764