Irish mortgage rates fell in April, against a background of increased political pressure for banks to bring down their mortgage rates. However new Irish property buyers continue to pay considerably more for their mortgages than borrowers across the euro area figures from the Central Bank show.

According to the regulator, the rate on new variable rate mortgages fell by 8 basis points over the month of April to 3.08 per cent. However, Irish homeowners continue to pay considerably more than their European counterparts, as the equivalent euro rate was 1.86 per cent, down by 3 basis points over the same period.

Switching activity fell during the month, with the number of renegotiated home loans falling by 53 per cent to € 416 million from October 2015, when renegotiations peaked at almost € 894 million. However, recent rate cuts from the likes of AIB and KBC Bank may yet stir up more activity in this section of the market in the weeks and months to come.

For mortgages on primary residences, the most pronounced fall was for standard variable rate mortgages, which fell by 49 basis points to 3.64 per cent over the year ending Q1-2016. Fixed rate PDH mortgage rates also declined, with rates fixed for 1-3 years falling by 34 basis points over the same period.

Rates on investment mortgages also fell, with three year fixed rates falling by the largest margin, down by 65 basis points to 5.36 per cent over the yer ending Q1 2016. Variable rates also fell, down by 26 basis points to 4.9 per cent over the same period.

Deposits

In conjunction with falling mortgage rates, the returns offered to savers on deposits is also falling. According to the Central Bank, rates on new business household deposits decreased by 2 basis points to 0.16 per cent as of end-April 2016. Again Irish consumers fare worse than their counterparts across Europe, with a new business deposit rate of 0.61 per cent for the euro area, down by 1 basis point over the same period.