And the gap between Irish rates and the average across the Eurozone is narrowing.
Rates continued to inch lower in December, according to new data from the Central Bank of Ireland.
The average mortgage rate for the month was 3.50pc. This is down from 3.80pc a year ago.
Across the Eurozone, the average was 3.32pc.
This leaves Irish mortgage rates at their lowest level since February 2023 and the sixth highest in the Eurozone.
Home-loan borrowing interest rates in this country are the sixth highest in the Eurozone.
Mortgage rates are falling. Photo: Getty Images
Today’s News in 90 – Wednesday February 11
However, the gap between the average rate in Ireland and the Eurozone has narrowed to just 0.18 of a percentage point.
This time last year the gap was closer to 0.50 of a percentage point and for many years leading up to 2022 the difference was close to 1.5 percentage points.
Back in 2022 Ireland had the highest mortgage rates in the Eurozone.
Mortgage experts warned that although rates are falling, there are wide variations in the rates on offer in this market.
An analysis by Bonkers.ie shows that for the average first-time buyer borrowing €300,000, with a 10pc deposit, variable rates range from 3.35pc to 4.70pc.
Rates for a three-year fixed mortgage range from 3.20pc to 4.85pc.
Prospective first-time buyers and switchers were reminded of the importance of shopping around when applying for a mortgage.
Daragh Cassidy, head of communications at mortgage broker Bonkers.ie said: “Despite the European Central Bank having kept rates on hold since last June, mortgage rates in Ireland have continued to edge lower in recent months as mortgage lenders have responded to market competition.
“And although our rates remain the sixth highest in the Eurozone, the gap between the average rate in Ireland and the Eurozone has narrowed to just 0.18 of a percentage point.”
He said the difference in rates between Ireland and the Eurozone average was as high as 1.5 percentage points in 2022.
“It’s also worth remembering that banks here don’t charge fees or commissions for issuing a mortgage, unlike in many other countries where arrangement fees of €1,000 or more can be common.
“So this makes Irish mortgages a tiny bit more competitive than headline rates alone might suggest,” Mr Cassidy said.
This year the European Central Bank could end up keeping rates on hold, with some analysts saying there may even be a cut.
He said he does not expect Irish mortgage rates to change much more over the coming months.
However, Revolut is expected to enter the Irish mortgage market later this year, so depending on how competitive its offering is, that could push rates down a bit.Mr Cassidy said the current 3.50pc average rate is just an average.
“There are 10 lenders in the Irish mortgage market at present when you include the credit unions and there’s a wide variation in rates across them all. And different lenders offer different cashback deals and incentives, which also need to be taken into account.”
A variable rate as low as 3.35pc is available for a standard first-time buyer with Bankinter’s (Avant Money) new tracker-like mortgage product.
But the variable rate at AIB is 4.16pc, and it is 4.70pc from PTSB, he said.