Commenting on the most recent Central Bank Retail Interest Rates for September 2021, Brokers Ireland said while the rate has improved minimally in the last month, at 2.72 percent Irish mortgage holders continue to pay the second highest rate in the euro zone, a full 1.45 percent ahead of the euro area average, a figure that would result in Irish consumers paying over €78,000 over and above their European neighbours on a €300k mortgage over 30 years.
“This is a substantial difference that could otherwise go towards pension planning or investment in children’s future education,” Rachel McGovern, Director of Financial Services at Brokers Ireland, said.
And she noted in today’s figures that Irish businesses borrowing between €250,000 and €1 million are paying an even greater margin over the euro zone average, at 3.01 percent, they are paying an excess of 1.56 percent.
“While not imminent, it does look as though we could in the next couple of years, if inflation stays elevated, see the end of historically low interest rates, and that is something we would advise people to think about and start planning for. If in doubt seek impartial advise from a broker,” Ms McGovern added.
She said we now have, for the first time in Ireland, attractive and genuinely long-term fixed interest rates of up to 20 and 30 years.
“So there is the possibility of locking in low interest rates for these extended periods. While it may be hard to imagine now interest rates in the early 1980s went over 16 percent,” she remarked.
She said long-term fixed interest rates give a strong level of security knowing what your future financial outgoings are going to be and encouraged existing mortgage holders who have not reviewed their situation in some time to consider switching for a better rate or the threat of switching which could prompt a current lender to do better. In such a scenario a new valuation of the home would be needed but the cost of that and any legal fees should be well worth the effort.
She also pointed out that most lenders have a lower interest rate where there is a better LTV (loan to value ), the ratio of the loan to the current value of the home.
And she said there are very competitive green mortgage rates offered by a number of providers for homes with better BER ratings.
