Research has confirmed that Irish consumers pay a higher rate of interest on overdrafts and earn a lower rate of interest on deposits than customers of financial institutions across the euro zone.
According to figures compiled by the European Central Bank and eight national central banks, Irish financial institutions are broadly competitive in terms of mortgage rates charged to customers.
Those taking out short-term loans for home improvements or other types of consumption are also generally getting a fair deal.
The statistics are part of a new monthly series that will be issued by the Central Bank of Ireland and the Irish Financial Services Regulatory Authority and provide the first authoritative comparison of up to 45 interest rate categories that apply across the euro zone. The Irish Bankers' Federation, the industry body for Irish banks and building societies, yesterday welcomed the publication of the data stating that it showed that Irish financial institutions compared very favourably, particularly on mortgages.
"The analysis puts paid to any notion that Irish borrowers pay over the odds for credit. In fact, borrowers fare comparatively well by any standard" IBF communications manager, Mr Felix O'Regan said yesterday.
The Central Bank has monitored changes in rates for new business which its believes is the best measure to use when making euro zone-wide comparisons.
It contends that mortgage rates in Ireland fell in line with European Central Bank rates.
Some analysts suggest, however, that the picture for short-term loans may not be as rosy as it appears because of the large amount of loans that are leveraged off mortgages in Ireland.
The bank has further established that non-interest rate charges applied by bank, such as fees associated with loans, are very low compared to other EU states and are minimal for housing loans.
Overdraft rates charged to business customers decreased in line with the ECB interest rate reductions between January and September while household overdrafts remained broadly unchanged over the period.
The bank included any interest penalties incurred for exceeding agreed limits and the interest charge applied to credit cards.
Loans to businesses also showed significant decreases over the period, with customers taking out bigger loans enjoying a lower rate of interest.
All deposit rates declined between January and September this year, more or less in line with ECB rates.
It noted that the rate changes for deposits with agreed maturity and deposits redeemable at notice were particularly close to ECB rate changes.
The Central Bank concludes that interest rates charged for housing and consumption loans compared favourably, while non-interest charges are significantly lower in Ireland.
The Central Bank concludes that deposit rates are lower in Ireland across all categories.
