Irish new mortgage rate 3.38% compared to 1.72% in Eurozone

Discussion in 'The Fair Mortgage Rates Campaign' started by Brendan Burgess, Jan 13, 2017.

  1. Brendan Burgess

    Brendan Burgess Founder

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    The Central Bank has published the data for November today

    http://www.centralbank.ie/polstats/stats/cmab/Pages/Retail Interest Rate Statistics.aspx

    This is the third month in a row, that it has highlighted the true figure and also published the appropriate Eurozone comparison. It looks like a policy change to tell the truth about mortgage rates.

    upload_2017-1-13_15-24-11.png

    I can't find the figure in the accompanying tables. And 3.38% still looks a bit low given these rates:

    upload_2017-1-13_15-25-33.png

    But it's not too far off.

    The gap between Irish rates and Eurozone rates is 1.66% (3.38% - 1.72%). That is a bit overstated because Irish banks are probably unique in giving new customers cash back. Other countries often charge admin fees.
     
  2. gnf_ireland

    gnf_ireland Frequent Poster

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    I often wonder why the Irish market needs to be so different to everyone else. Why can Ireland not compete on rates and have arrangement fees like everyone else? Should an arrangement fee not be treated the same way as stamp duty, solicitors fees or the market valuation ?

    Is this the Irish paradox - we want European rates but on our own version of the mortgage :)


    On a separate note, glad the central bank is providing a fair set of data at last.
     
  3. Sarenco

    Sarenco Frequent Poster

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    I suspect tracker mover products and 1-year fixed rates (treated as variable rates for these purposes) account for the difference.

    I agree that the various incentives offered by Irish lenders and the lack of arrangement fees in the Irish mortgage market complicate the comparison somewhat.

    Even so, it's disappointing that the 1.66% spread between Irish and Eurozone average new business rates (excluding renegotiations) didn't narrow between September and November.
     
  4. Markel

    Markel Registered User

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    Presumably it's also easier to deal with mortgages in default in other jurisdictions as well? That and the fact that we are only small and as such have limited competition
     
  5. Brendan Burgess

    Brendan Burgess Founder

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    Hi Sarenco

    The reason I am complimenting the Central Bank is that they are excluding renegotiated trackers from the figures.

    It hadn't occurred to me, but I assume that they are excluding tracker mover products as well. Having said that, there are so few of them, that I doubt if they would make any material difference if they were included.

    Brendan
     
  6. Sarenco

    Sarenco Frequent Poster

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    Hi Brendan

    Yes, I agree that the small volume of tracker movers means they are unlikely to make a material difference. However, they are new loans (as opposed to renegotiated loans) so I assume they would be included in this figure.

    In any event, I suspect that categorising 1-year fixed rates as "variable rates" would have a more meaningful impact on the figure.
     
  7. boe

    boe Frequent Poster

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    With the Central Bank now highlighting the difference in the rates, what will be the next step? When are customers likely to see any movement in rates and who will drive it? Will it be the government via legislation, the central bank or are we dependent on the banks themselves doing something voluntarily?