Irish consumers will pay € 80,000 more than their European counterparts, on a mortgage of €300,000 over 30 years.
According to Brokers Ireland, an umbrella group representing financial brokers, this will be because of the premium charged by lenders here.
Central Bank’s retail interest rates for August shows that the average rate charged on new mortgages here over the past 12 months was 2.83 per cent, compared to a euro area average of 1.35 per cent.
The 1.48 per cent differential is costing Irish consumers €80,481.60. The premium levied on Irish borrowers indicates the lack of competition in the mortgage market.
Director of financial services at the group, Rachel McGovern, said the best advice they could offer consumers is to shop around without hesitating to switch lenders.
Since the mortgage is likely to be the consumers steepest outlay financially there are substantial savings to be achieved with some lenders even offering incentives to switch, which is much easier now than before.
Ms McGovern said interest rates for SMEs were even worse than those for mortgage holders with Irish SMEs borrowing amounts up to €250,000 having to pay an excess of over 3 per cent on their counterparts in the euro area.
New mortgage agreements being 38 per cent at €468 million in August shows the impact of Covid- 19. The figures show fixed-rate mortgages (including renegotiations) accounted for 77 per cent of all new agreements in the three months to August compared with 84 per cent in the euro area.
Ms McGovern noted that Covid has affected many areas of the market and lenders have become more risk averse. But she assured that since there is huge pent- up demand the demand for mortgages will continue to remain strong.