Mortgage interest rates in Ireland have fallen to their lowest level in more than two years, according to new data from the Central Bank. The average rate on new mortgages in May dropped to 3.66%, down from 3.72% in April and significantly lower than the 4.17% recorded in May 2024.
This marks the lowest average mortgage rate since April 2023, offering some relief for borrowers after a period of rising costs. However, despite the downward trend, Irish rates remain well above the euro zone average of 3.32% and rank as the eighth highest among euro-using countries. Latvia currently holds the highest average rate at 4.29%, while Malta has the lowest at just 1.8%.
The decline in Irish mortgage rates reflects the impact of successive interest rate cuts by the European Central Bank (ECB). Since September 2023, the ECB has reduced its main rate eight times, bringing it down from 4% to 2%.
Total new mortgage lending in Ireland reached €943 million in May, a 4.3% increase compared to April and 15% higher than the same month last year.
Daragh Cassidy of Bonkers.ie welcomed the rate reduction, calling it “good news for prospective first-time buyers and mortgage switchers.” He noted that while the ECB is expected to hold rates steady at its July 24 meeting, further cuts could follow later this year.
However, Cassidy emphasised the importance of shopping around, as mortgage rates vary significantly between lenders. “While the average is 3.66%, some lenders are offering rates as low as 3.18%, while others go up to 4.70%,” he explained. “For someone borrowing €300,000 over 30 years, the difference between those rates could amount to over €261 a month—or more than €3,000 a year.”
Fiona McMahon, Senior Mortgage Advisor at NFP Ireland, echoed the sentiment, saying that despite positive signs, Irish borrowers still face steeper costs compared to many European peers. “Avant Money has reintroduced mortgage rates under 3%, the first time since 2022. But such offers remain rare,” she said.
McMahon also pointed out that many Irish banks have been slow to pass on ECB rate cuts to customers, especially for fixed and variable rate products. “Banks argue they didn’t raise rates as sharply during the last tightening cycle, but that offers little comfort to buyers facing high property prices and tight supply,” she added.
Experts continue to advise borrowers to explore their options, use comparison tools, and seek professional advice to secure the best mortgage deal.
