Irish mortgage rates fell below the euro zone average for the first time in over three years in June despite a slight rate in the interest charged on new loans.
The average interest rate on new mortgage agreements at the end of June was 3.49 per cent, according to new Central Bank figures. That is one basis point (0.01 of a percentage point) higher than in May but 11 basis points lower than the same time last year.
That compares with the 0.14 per cent average being offered by the banks for overnight deposits, or 1.86 per cent on fixed term savings.
The average rate of interest on mortgage loans across the euro zone rose faster in the month, to 3.51 per cent, marking the first time the Irish result was lower than the pan-European average since February 2023.
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The Irish rate was the 12th highest across the euro bloc in June, according to the Central Bank, falling between the 3.5 per cent average in Italy and the 3.27 per cent in France. Ireland’s position is unchanged from the previous month and down five places from the same time last year.
“Today’s figures confirm what a lot of mortgage holders have been bracing for,” said Sorcha Timoney, mortgage team manager at advisory firm NFP Ireland. “Anyone coming off a fixed rate or on a variable will feel this increase in their monthly repayments.
“Due to strong competition in the Irish market, the gap between what Irish borrowers pay and the wider euro area average has been narrowing but if rates continue to creep up, we could see this gap widening once again,” she said.
The Central Bank data show that fixed rate mortgages accounted for 93 per cent of the volume of all new home loan agreements in June, an increase of eight percentage points from the same period last year. Fixed rate loan interest averaged 3.46 per cent, two basis points higher than in May.
New variable rate mortgages had a weighted average interest rate of 3.96 per cent last month, “the lowest level since December 2022”, the Central Bank said and down seven basis points from May and 12 basis points in annual terms.
Lenders sanctioned €1.1 billion in new mortgage loans in June, up 13 per cent on the May number and the highest figure so far this year. The figure is 8.5 per cent ahead of the €996 million in new loans agreed in the same month last year.
An additional €586 million of business was done in renegotiating mortgages last month, more than double the €285 million of this business agreed in June 2025.
The volume of renegotiated mortgages totalled €586 last month, €301 million higher than June 2025’s figure and 94 per cent of which had fixed interest rates. People renegotiating their loans did better on interest rates, agreeing an average rate of 3.23 per cent, down two basis points from May and close to a quarter percentage point from this time last year.
Analysts and advisers were quick to point to a number of potential factors for the increase in Irish mortgage interest rates, from competition in the domestic market to ongoing conflict in the Middle East.
Trevor Grant, chairman of Irish Mortgage Advisors, said borrowers should not be “unduly alarmed by the widely anticipated September ECB rate hike”, adding that competition was the main factor influencing home loan rates in Ireland.
“Most lenders did not move on the back of the ECB rise in June, though they may see any ECB increase in September as an opportunity to increase rates,” he said.
Rachel McGovern, chief executive of Brokers Ireland, advised people to examine their options.
“Regardless of where you are in the cycle of your loan, now is the time to review because when things turn changes could happen more rapidly than you expect, that is the nature off such changes,” she said, adding that “already we’re seeing niche lenders increasing rates”.
However, as Bonkers.ie spokesman Daragh Cassidy, noted, Ireland’s three big lenders – AIB, Bank of Ireland and PTSB – which account for around 90 per cent of all new mortgage lending in Ireland, have yet to increase their rates.
An analysis by Bonkers.ie found that for an average first-time buyer borrowing €300,000 with a 10 per cent deposit, variable mortgage rates currently range from 3.85 per cent to 4.85 per cent. Rates for a three-year fixed mortgage range from 3.2 per cent to 5.45 per cent, it said.
Away from mortgages, lenders did raise interest rates on other consumer loans more dramatically – by 23 basis points – to 7.48 per cent. The average for variable rates loans – which accounts for over three-quarters of all consumer borrowing – was 8.09 per cent that month, compared to 5.43 per cent for fixed rate loans.
There was €266 million of new consumer borrowing agreed in the month.
On fixed term savings, the 1.86 per cent average available in Ireland is the 13th best rate available across the euro zone, comfortably ahead of the 1.21 per cent in Greece but still well shy of rates above 2.5 per cent available in Finland and the Netherlands.
The Central Bank said Irish savers put €1.6 billion into fixed term deposits in June. That was 14 per cent up on May and 43 per cent stronger than in June 2025.
