Ireland remains the seventh most expensive country in the euro area for new mortgages, with new data from the Central Bank showing the average rate at the end of July was unchanged from June at 3.6 per cent.

While the figure was down 51 basis points compared with July last year, the euro area average stood at 3.3 per cent in the month. Latvia topped the table of 21 countries at 4.16 per cent, while Malta enjoyed the cheapest rate of 1.76 per cent.

The average interest rate on new fixed rate mortgages in Ireland was 3.52 per cent, unchanged from June and down 43 basis points year-on-year. The figure for new variable mortgages was 4.09 per cent, down 1 basis point from June and 36 annually.

There was a significant increase in the proportion of new mortgages that were fixed rate in July, rising to 86 per cent from 69 per cent in the same month last year. This was their highest share since August 2023.

Fiona McMahon, senior mortgage adviser with insurer NFP Ireland, said it was “disappointing” the average rate remained static.

“This marks a change in the trend which developed earlier this year, which saw the cost of Irish mortgages consistently falling,” she said. “The static mortgage costs will be a concern to many existing mortgage holders and would-be house buyers.”

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She said mortgage-holders ought to be mindful there could be a limit to the extent to which rates could fall going forward. Following a pause in European Central Bank rate cuts last July, it is expected to leave them untouched on Thursday.

“As euro zone inflation appears to be under control and the bloc’s economy is showing resilience, it’s looking unlikely that there will be any more ECB rate cuts over the coming months,” said Ms McMahon.

Len Bird, credit underwriter with mortgage lender Nua Money, went further, suggesting the ECB may even hike rates in the coming quarters, particularly if inflation begins to rise again across the bloc.

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“While mortgage arrears have been heading the right direction in recent years, given the anticipated challenges facing the Irish and global economy, this could potentially change,” he warned.

“Since the start of this year, both the Central Bank and the ESRI have repeatedly warned of the risks to the Irish economy posed by the uncertain global economic outlook, particularly in relation to the see-saw tariff announcements of US president Donald Trump.”

In line with increasing house prices, average mortgages being drawn down have reached record levels in recent months. The total volume of new mortgage agreements rose to €1.2 billion in July, which was an increase of €185 million or 19 per cent annually.

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Renegotiated mortgages totalled €313 million in July, which was €28 million higher than the previous month and €152 million higher than July last year.

Fixed rate mortgages at the end of the month constituted 64 per cent of renegotiated mortgages, which was unchanged from June. The average interest rate here was 3.47 per cent, unchanged from the previous month and down 42 basis points annually.

Separately, the average interest rate on household overnight deposits remained unchanged since November at 0.13 per cent. While Irish households hold about €160 billion in savings, more than €140 billion is held in overnight accounts.

Brokers Ireland deputy chief executive Rachel McGovern described the rate as “extremely poor”, and said the Government should implement the funds review report it carried out last October in next month’s budget.

She said a preference among Irish households for shorter-term, more accessible deposit account types relative to the euro area cost them almost €800 million in unearned interest last year alone.