Irish Mortgage Rates Drop to Lowest Level Since April 2023

On Feb 13, 2025

Dublin: In a positive development for mortgage borrowers in Ireland, the Central Bank has reported that interest rates on new mortgages have fallen to their lowest level since April 2023. In December, the average interest rate on new mortgages declined from 3.97% to 3.8%, marking a significant improvement. By comparison, the average mortgage rate in the Eurozone stood at 3.35% during the same period.

Falling Rates Benefit Homeowners and Buyers

Experts highlight that this downward trend is particularly beneficial for tracker mortgage holders and is exerting pressure on variable and fixed-rate mortgage providers to follow suit. Analysts also note that the current rate levels are the lowest seen in two years, offering significant financial relief to homeowners, prospective buyers, and borrowers.

Mortgage Rates Could Drop to 2.5% This Year

Industry experts predict that if the European Central Bank (ECB) continues to cut its key lending rate in the coming months, mortgage rates in Ireland could fall to 2.5% or lower by 2025. The reduction in ECB rates is also expected to compel non-bank lenders to lower their mortgage rates, leading to better deals for borrowers.

Non-Bank Lenders Responding to Market Trends

Already, non-bank lender Nua Money has announced a reduction in mortgage interest rates, with other lenders expected to follow suit. Several major banks, including MoCo, Permanent TSB, and Bank of Ireland, have also recently lowered their mortgage rates in response to shifting market conditions.

Ireland’s Mortgage Rates Still Above Eurozone Average

Despite the decline, mortgage rates in Ireland remain 45 basis points higher than the Eurozone average—a decrease from 54 basis points in November.

Mortgage Activity on the Rise

According to the Central Bank report, approximately €12 billion in new mortgages were issued in December, representing a 13% month-on-month increase and a 19% rise compared to December 2023. This surge reflects the impact of declining interest rates and growing consumer confidence in the housing market.