Irish mortgage rates are still over twice the eurozone average

Brendan Burgess

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From the Central Bank data for September released today

5101


And it highlights that Irish lenders continue to charge much higher rates for variable rate mortgages.

Of course, what these tables don't show is the 100k + borrowers who are paying over 4% on existing mortgages because the lenders, other than AIB, don't automatically pass on cuts in mortgage rates to existing customers.
 
Are the risk weights for Irish mortgages in banks models higher than across the eurozone so they are forced to have higher rates because they are perceived as a riskier product from a regulated model perspective?
 
Are the risk weights for Irish mortgages in banks models higher than across the eurozone

Yes.

They are higher for fixed rates and for variable rates - so it does not explain why variable rates are so high.

They are higher for BoI and AIB so it does not explain why AIB's variable rate is 2.7% and BoI's is 4.5%

They are higher for Avant Money and the other lenders.

And they are higher for high LTV loans than they are for low LTV loans, which does not explain why some banks charge the same for a 50% LTV as they do for a 90% LTV.

Brendan
 
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