Key trends evident in the Irish mortgage market, says IBF

August 05, 2010

  • At least half of all mortgages here are tracker products

  • Average mortgage costs here still among most competitive in EU

  • Fixed-rate mortgages growing in popularity over variable rate

The Irish Banking Federation (IBF) has today pointed to a number of key mortgage market trends that are evident from the latest figures published separately by the Central Bank of Ireland, the European Mortgage Federation and the European Central Bank.

1. The latest Central Bank figures for new mortgage lending show that the share of fixed-rate mortgages grew  in Q1 2010 to account for 26% of the market, with variable rate mortgages (incl. trackers) accounting for 74%.  The corresponding share for Q4 2009 was 19.6% fixed and 80.4% variable/tracker.  As the graph below shows, the fixed rate share of new lending is the highest for quite some time.

Fixed Rate Share is Increasing - New Mortgages

Source:  Central Bank of Ireland

2. Q1 2010 comparative figures published today by the European Mortgage Federation (EMF), drawing on Central Bank data, on the existing stock of mortgage lending show the breakdown in the market here to be 14.3% fixed rate and 85.7% variable rate (incl. trackers).

However, it is important to note that this variable rate category includes tracker products (as classified by the Central Bank of Ireland).  Indeed, the Central Bank has estimated that as much as 60% of outstanding variable rate mortgages here are tracker products – indicating that at least half of all outstanding mortgages are tracker products.

Thus, recent claims by the Irish Mortgage Corporation that EMF data show Irish mortgage holders to be uniquely vulnerable to rising interest rates compared to many of their EU counterparts are inaccurate.

3. The most recent European Central Bank figures show that average mortgage costs in Ireland are among the lowest in the EU.

Mortgage costs in the euro area

Source:  European Central Bank

Note:  Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.  

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