The average interest rate on new mortgages fell marginally in March but remains notably higher than the euro area average.
New figures released by the Central Bank of Ireland on Wednesday show average Irish rates on new mortgages fell by two basis points compared to the previous months to 3.77%, which was 44 basis points higher than the euro area average of 3.33%.
Irish rates on new mortgages fell one place in March to the sixth highest in the euro area.
New fixed-rate mortgages, which constitute more than three-quarters of new mortgage agreements, also fell by two basis points in the month to 3.58%, the Central Bank found.
For new variable-rate mortgages, the average interest rate remained unchanged compared to the previous month at 4.42%.
The total volume of pure new mortgage agreements increased to €904m in March, reflecting a 16% increase in monthly terms and a 43% increase annually. Meanwhile, renegotiated mortgages totalled €292m in March, €24m lower than the previous month and €147m higher than in March 2024.
The interest rate on new consumer loans was unchanged at 7.29% in March 2025, the Central Bank found, with the total volume of new consumer loans totalling €257m, of which 63% had a floating rate.
New floating rate consumer loans had a weighted average interest rate of 8.37% at the end of March, which was 296 basis points higher than the weighted average rate on new fixed rate consumer lending at a rate of 5.41%.
On the flip side, interest rates on household overnight deposits stood at 0.13% in March, remaining unchanged since November 2024.
The weighted average interest rate on new household deposits with agreed maturity decreased to 2.26% in the month the regulator found, a seven basis point decrease from February.
As of the end of March, the average rate on new household deposits with agreed maturity was at its lowest level since August 2023. The level of new business in this category was €1.2bn, a 4% monthly decrease and a 24% annual increase.
“Today’s report shows that the average interest rate on new mortgages continues to fall,” said Trevor Grant, chairperson of the Irish Mortgage Advisors.
“With another ECB rate cut likely in June and competition in the home loan market heating up, this trend will likely continue for some time, meaning the reality of sub-3% mortgage rates is edging nearer in Ireland, possibly from this summer.
Mr Grant said this would mark a significant milestone for Irish mortgage borrowers and should lead to substantial savings for homeowners and house buyers.
“While the ECB does appear to be adopting a more cautious tone around rate cuts now, the groundwork for a June 5 cut seems to be in place. However, mortgage borrowers and would-be house buyers should exercise a certain amount of prudence now.
“Last month’s ECB rate cut was the seventh reduction in a row so interest rates have already fallen substantially since June 2024. This means the pace at which the ECB is cutting rates could slow now. Borrowers should therefore avoid making large financial decisions now based on the hope rates will fall substantially in the future. ”
