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Mortgage holders with non-bank lenders pay higher rates

The average Interest rate charged on new mortgages in Ireland was 1.5% higher in December than in the same month a year earlier, according to the latest data from the Central Bank.

On average, new mortgages carried a rate of 4.19%, down six basis points on November.

It means that on average mortgage rates in Ireland are the eleventh most expensive in the euro zone.

The equivalent average rate across the euro area during the month was 4.06%, seven basis points lower than in November.

Fixed rate mortgages made up 81% of the total volume of new home loans during the period and the average rate on them was 4.14%.

That means they are now 1.53% higher than in December of last year, but down six basis points from November.

On average new variable rate mortgages carried a rate of 4.4%, up 0.55% on the same month in 2023, but down seven basis points on November.

Today’s Central Bank figures show that new mortgages worth a total of €980m were agreed in December, up 14% on November, but down 22% on the same month a year ago.

When it comes to rates on the savings of households, interest rates on overnight deposits remained unchanged at 0.12% in December.

That means Ireland has the ninth lowest rates on overnight deposits in the euro area.

But the average rate on term deposits rose to 2.73%, an increase of 0.11% since November.

That left terms deposit rates at their highest level since January of 2009, the Central Bank said.

Nevertheless, the equivalent rate in the euro area remains higher at 3.29%.

The Central Bank also published new data which compares average mortgage interest rates charged by non-bank lenders compared to the main retail banks in December.

It shows that those who have mortgages from non-bank lenders are paying 4.52% on average, compared to 3.6% for those with mortgages from banks.

The average rate charged by non-bank lenders on the more than 42,000 variable mortgages they hold was 6.09%, compared to 4.07% in the banks.

The 36,244 tracker mortgage customers in non-bank lenders are paying 5.59% on average, just below the average rate of 5.6% in the banks.

The 38,249 fixed mortgage holders in the non-bank lenders are paying 2.57% on average, compared to 2.95% paid on average by equivalent borrowers from banks.

Overall, the average interest rate charged by non-banks who are actively lending was 3.03%, but at the non-lending non-banks it was 5.56%.

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