New data from the Central Bank of Ireland shows that the average interest rate on new mortgages stood at 3.58% at the end of August, marking a modest decline of two basis points from July and a sharper drop of 53 basis points compared to the same month last year.
Despite the reduction, Irish mortgage rates remain above the euro area average of 3.36%, with Ireland ranking as the country with the eighth-highest average rate among Euro Area members—down one place from seventh in July.
The figures reveal that fixed-rate mortgages continue to dominate the Irish housing finance market, accounting for 87% of new mortgage agreements in August. The average rate for these fixed-rate loans was 3.5%, down slightly from the previous month and 45 basis points lower than in August 2024. Variable-rate mortgages, meanwhile, carried an average interest rate of 4.09%, unchanged from July but 36 basis points lower year-on-year.
The Central Bank also reported that the total value of new mortgage agreements reached €966 million in August. This represents a 14% increase compared with the same month last year, though it was down 17% from July’s total, reflecting a cooling trend in monthly lending volumes.
Commenting on the latest figures, Ross Lynch, Senior Mortgage Advisor at NFP Ireland, said the slight decline in rates suggests that the market has reached a period of relative stability. “While the average interest rate on new mortgages has fallen slightly, it remains broadly unchanged, continuing the plateau seen over the last few months,” Lynch noted.
He cautioned that many homeowners and prospective buyers had been hoping for steeper reductions in borrowing costs. “This could be a concern for those expecting deeper cuts from the banks,” he said.
Looking ahead, Lynch warned that several global economic factors could influence future interest rate movements. “Tariffs on EU imports to the US could drive inflation across the eurozone. If higher costs are passed on to consumers, the European Central Bank may need to revisit its current stance on interest rates, which could increase pressure on mortgage holders in the months ahead,” he explained.
He added that competition among lenders would play a crucial role in helping borrowers manage costs. “Those on variable rates, or nearing the end of a fixed term, could save hundreds or even thousands of euro annually by reviewing their mortgage terms. In some cases, lower rates may be available from existing lenders if a borrower’s loan-to-value ratio has improved,” Lynch advised.
