Savings by Irish households reached a new high in September 2018, as consumers continued to plough their money into saving accounts despite the record low returns on offer.
Figures from the Central Bank show that deposits rose by €3.3 billion, or by 3.5 per cent, in the year to end-September 2018, pushing deposits up to €97.2 billion, above the Celtic Tiger peak of €94 billion reached in 2009. This was the 16th consecutive quarter of annual growth, and shows that Irish savers continue to put their money into deposit accounts where returns struggle to exceed 0.5 per cent a year.
The figures also show that mortgage lending for a home recorded its largest increase since the series began, of €2.4 billion.
Most of the advance in mortgage lending was in fixed rate mortgages, which increased by €1.4 billion over the third quarter of the year. Some €1 billion went into loans with a fixed rate of between three and five years. At €17 billion, fixed rate mortgages now represent 26 per cent of total mortgage lending.
Variable rate mortgages
Lending to variable rate mortgages fell during the third quarter however, down by €705 million, with tracker mortgages recording the largest decline of €415 million.
“The developments are reflective of an increasing number of borrowers entering into fixed rate contracts with a lower interest rate than variable rate contracts,” the Central Bank said.
Lending for other personal loans also jumped, increasing by €133 million over the three months to September 2017, signifying the largest increase since September 2017.
Investment mortgages however fell by 13.5 per cent, or by €1.6 billion, in the year to end-September.
