There are hopes that mortgage rates will fall further as the European Central Bank is expected to cut its rates for the eighth time next month.
That has led to predictions that home-loan borrowing rates could keep falling, and hit 3pc by the end of the year.
Figures from the Central Bank show the average mortgage rate fell slightly to 3.77pc, down from 3.79pc in February.
This left Ireland with the sixth highest rates in the Eurozone.
An improvement of one place from the previous month.
The Eurozone average rate remained unchanged in March at 3.33pc.
Today’s News in 90 Seconds – May 14th
Statistics from across the Eurozone show that home-loan borrowing rates continue to vary hugely across the currency bloc.
They are as low as 1.81pc in Malta to as high as 4.38pc in Latvia.
Central Bank of Ireland statistics also show that the average interest rate on household deposits fell in March.
Deposits with a fixed maturity fell from 2.33pc in February to 2.26pc the following month as recent European Central Bank (ECB) rate cuts put pressure on savings and deposit rates.
Irish households held €162bn in deposit accounts as of March 2025. About 86 per cent of this was held in current or overnight accounts – down from a peak of 94 per cent in late 2022.
Spanish owned Avant Money, owned by Bankinter, now has a banking licence in this market and is expected to launch deposit products soon in what could be a boost to competition.
And Goldman Sachs is reported to be in talks with the Central Bank about launching is digital bank Marcus in Ireland.
Daragh Cassidy, head of communications, at mortgage broker bonkers.ie said mortgage rates are likely to continue to fall.
“Mortgage rates are now at their lowest level in almost two years and should continue to ease a bit more over the rest of the year.
He said that in the past few weeks we have seen rate reductions from AIB and also smaller lenders like Núa Money.
“And if the ECB cuts rates once or twice more later this year, as is still expected, we should see some further mortgage rate reductions.”
Hopes of a new ECB rate cut on June 5 were thrown into doubt when ECB governing council member Isabel Schnabel questioned the need for a new cut.
But most economists expect the ECB to reduce rates as the central bank’s inflation target is coming into view.
Mr Cassidy said: “The lowest rate in the market is currently 3pc with AIB and PTSB, albeit with caveats.
“But we could see a rate slightly under 3pc on offer by the end of the year for mortgage customers with big housing deposits.”
He said the sub-2pc rates we saw as recently as 2022 do not look like returning any time soon.
“This is particularly relevant for some of those coming off fixed rates in the next year or so. As despite the overall decline in rates, some may still be facing higher repayments than what they’ve been used to,” he said.
Mr Cassidy said the latest figures also show a small drop in the average fixed deposit rate, which he said was unsurprising.
He said this rate is likely to fall a lot more over the coming months.
By the end of the year the best savings rate on offer may be just 1.5pc or even less, he said.
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