The average interest rate attached to new mortgage agreements in the Republic fell in September, almost converging on the euro area average, Central Bank figures show. However the figures predate the European Central Bank’s last interest rate increase.
They show the average interest rate on new mortgages in the State fell by six basis points to 2.58 per cent in September. In the same period, the equivalent euro area average rose by 19 basis points to 2.40 per cent.
Bank of Ireland and Permanent TSB have yet to pass on any of the 2 percentage points rate increase from the ECB to their non-tracker customers while AIB has only increased its fixed rates by 0.5 of a percentage point.
However, consumer advocates are warning that the situation will not last and that borrowers should brace themselves for significant increases in their monthly repayments in the coming months.
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Ironically, the new era of higher borrowing costs has seen the differential between mortgage rates here and those in the rest of Europe, a long-standing controversy, decline.
The latest Central Bank data means the Republic has the 12th highest mortgage rates in the euro zone behind countries such as Germany and the Netherlands.
