Responding to the most recent Central Bank Retail Interest Rates publication for April, showing Ireland at a weighted average interest rate of 3.63 percent in April, 0.6 percent ahead of the euro area average, Brokers Ireland said the Irish market is now in worrying territory for both aspiring and existing borrowers.
“The ECB has already flagged a likely two further interest rate rises on top of which Irish lenders have been increasing theirs, even if slow to do so at the beginning.
“While it’s good, and justified, to see savings rates beginning to improve it may well mean that this further impacts borrowers. In this regard the two pillar banks have the lion’s share of the market and one would like to see more competition,” she said.
She said the current market was particularly worrying for borrowers on short-term fixed rates. Most borrowers in recent years have taken out fixed rates and of these more than six in ten are fixed for less than three years.
“They will now be coming off their current agreements to face much higher interest rates," she added.
Ms McGovern said all mortgage holders who have not done so should review their positions, and ideally seek the advice of a mortgage broker.
“There are still substantial savings to be achieved by many borrowers. There are still good fixed rates in the 4.05 percent to 4.8 percent range to be got for long periods of ten years. There are also five year fixed ‘green mortgage’ rates of 3.70 percent upwards (depending on loan to value ) for those with homes that have a BER rating of B3 or better," Ms McGovern concluded.
