The total volume of new mortgage agreements dropped 14 per cent in August compared with the same month last year, new data from the Central Bank shows.
The regulator said the total volume of new mortgage agreements decreased by €129 million in July to €851 million in August, which was 13 per cent lower than the previous month, and a 14 per cent decrease from August 2023.
The weighted average interest rate on new Irish mortgage agreements at the end of August was 4.11 per cent, which was unchanged since May and up 1 basis point annually.
The equivalent euro area average decreased by 1 basis point to 3.71 per cent. The rate in Ireland exceeded the euro area average by 40 basis points, and remained the sixth highest in the euro area.
The weighted average interest rate on new fixed rate mortgage agreements, which constitute 68 per cent of the volume of new mortgage agreements, was 3.95 per cent. This was unchanged from July and 8 basis point lower than a year earlier.
Renegotiated mortgages totalled €138 million compared to €161 million recorded in the previous month.
The weighted average interest rate on renegotiated fixed rate mortgages was 3.87 per cent, down from 3.93 per cent in August 2023, while the equivalent rate for the variable renegotiated category stood at 3.96 per cent.
The data also shows the interest rate on new consumer loans increased by 28 basis points to 7.7 per cent. The total volume of new consumer loans was €230 million, 69 per cent of which had a floating rate.
New floating rate consumer loans had a weighted average interest rate of 8.51 per cent, which was 257 basis points higher than the weighted average rate on new fixed rate consumer lending.
Interest rates on household overnight deposits remained at 0.13 per cent in August 2024 for the eighth consecutive month.
Brokers Ireland deputy chief executive Rachel McGovern said many mortgage holders are biding their time in the hope of further interest rate cuts, perhaps one next week and possibly another in December.
However, she said: “Nothing is certain with geo political threats abounding.”
Irish Mortgage Advisors chairman Trevor Grant said ECB rate cuts could see prices “soar even higher”.
“The challenge to house hunters of runway house prices, with the latest CSO house price report marking the eleventh consecutive month of annual house price growth, should not be underestimated,” he said.
On the “very low” 0.13 per cent interest rate on household overnight deposits, Ms McGovern said some consumers are beginning to move toward accounts where they will get a better return.
“But savers still hold a gigantic €137 billion in such poor value accounts, which should only really be for emergency situations,” she said.
“The latest data shows annual headline inflation dropped to 0.7 per cent in September. Even still, this is way ahead of the 0.13 per cent overnight deposit rate, eroding those savings at the difference between the two rates.”
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