Irish lenders offered the fifth-highest average interest rates on new mortgages in the euro area in February as borrowing costs for homebuyers continued to fall, the Central Bank of Ireland has said.
The weighted average interest rate on a new mortgages in the Republic was 3.79 per cent, down 0.03 per cent or three basis points from January and 0.5 per cent or 50 basis points from the same month last year.
In its latest retail interest rates statistical release on Wednesday, the Central Bank said the average rate in the Republic exceeded the euro area average by 46 basis points in February, making it the fifth highest in the euro area.
The total volume of new mortgage agreements jumped to €779 million in February, up 15 per cent from January and 22 per cent year-on-year, the Central Bank said.
Separately, deposit rates on long-term savings accounts rose slightly in the month, with the average interest rate on new household accounts with a fixed maturing up by 0.5 per cent or five basis points in the month.
On an annual basis, however, term deposit rates have fallen by 0.26 per cent.
Deposit rates hit their highest level in more than a decade last year as domestic banks responded to a record run of 10 rate increases by the European Central Bank (ECB) in the 15 months up to September 2023 as it looked to tame inflation.
However, Irish lenders have embarked on a period of lowering deposit and loan pricing as the ECB continues to reduce official rates.
The ECB is expected to cut rates again when its governing council meets later this month.
ECB officials said on Wednesday that the case for a cut has been boosted by the friction in global markets triggered by US president Donald Trump’s tariff agenda in recent days.
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“Since the March meeting, many of the risks identified at that time have now either materialised or are materialising,” policymaker Ollie Rehn said in a speech published by the Bank of Finland, where he is the governor.
“Based on the overall assessment of inflation and growth, I believe the case for further rate cuts at the April meeting has clearly strengthened,” he said.
French central bank governor Francois Villeroy also told reporters that the uncertainty created by the Trump administration’s announcement of “reciprocal” tariffs last week boosted the case for a rate cut.
“We still have room to cut rates,” he said.
