There was a bit of media and political uproar in Ireland over the recent PTSB mortgage rate rise. With mortgage rates in Ireland at the lowest in years – how do the interest rates here compare with those available in other EU countries?
Figures compiled by the European Central Bank show the average rates available on loans for house purchases at “floating” (variable) rates in the Euro zone at June 2009
Average Irish mortgage rates are shown as 2.68% . We are amongst the lowest in the comparison. There are only 2 countries in the June 2009 survey with lower mortgage rates than Ireland. (Finland 2.51% ; Portugal 2.54%) . All the other 12 euro-zone countries have higher rates than Ireland.
The average mortgage interest rate for all the countries surveyed was 3.13%. The individual countries rates are shown below.
Italy – 2.85%
Spain – 2.95%
Greece – 3.46%
Malta – 3.54%
Germany – 3.73%
Holland – 3.79%
France – 3.91%
Austria – 3.97%
Slovenia – 4.11%
Slovakia – 5.48%
Cyprus – 6.1%
At the peak of ECB rates in Sept 2008 (4.25%) the average rate of mortgages in the Eurozone was 5.8% and the average rate in Ireland according to the ECB was 5.58%.
Rates in Ireland are 48% of what they were in September 2008 – whilst in France they are at 73% of the levels in Sept 2008. In Austria rates in June 2009 are 67% of the Sept 2008 peak. Only in Luxembourg, Portugal and Finland have mortgage rates fallen more than in Ireland.
So maybe mortgage rates in Ireland do need to rise in line with some of the other EU countries? In the aftermath of the government guarantee the banks were falling over themselves to pass on rate drops in full after each ECB cut. Media coverage named and shamed those lenders that didn’t follow the pack. Maybe those cuts to keep in the good books were not sensible for the survival of the banks ? It is likely that more rate rises in Ireland will happen soon – and hopefully the press will have moved on to a different story by then.