Irish mortgage rates continued to fall at the end of last year, decreasing to their lowest level in almost three years.
New figures released by the Central Bank of Ireland on Wednesday found that the average mortgage rate fell to 3.5% in December, down marginally from 3.53% in the previous month.
The equivalent euro rate was 3.32%, with the Irish average exceeding this by just 18 basis points, the narrowest recorded margin since December 2023.
The average Irish mortgage rate was the sixth-highest in the eurozone, where interest rates continue to vary significantly across the bloc, from as low as 1.98% in Malta to as high as 3.74% in Germany.
However, according to a recent analysis by Bonkers, wide variation in rates also exists in Ireland, with the average first-time buyer borrowing €300,000 with a 10% deposit facing variable rates between 3.35% to 4.7%.
The weighted average interest rate on new fixed-rate mortgage agreements, which constitute 92% of the volume of new mortgage agreements, was 3.44% in December, down two basis points from the previous month and down 17 basis points on an annual basis.
Meanwhile, the weighted average interest rate on new variable rate mortgage agreements was 4.17% in December, nine basis points up from the previous month and 16 basis points lower in annual terms.
On the deposit side, Central Bank figures show the average interest rate on household overnight deposits stood at 0.13% in December 2025 for the 13th consecutive month.
Meanwhile, the average interest rate on new household deposits with an agreed maturity remained at 1.86% in December, which was unchanged from the previous month and a 59 basis point decrease annually.
The Irish rate was the 9th highest in the euro area at the end of December, rising one position from the previous month.
Speaking on Wednesday’s figures, Daragh Cassidy, head of communications at Bonkers.ie said: “Despite the European Central Bank keeping rates on hold since last June, mortgage rates in Ireland have continued to edge lower over the past few months as lenders have reacted to market competition.
“Although our rates remain the sixth highest in the Eurozone, the gap between the average rate in Ireland and the Eurozone average has narrowed.”
“Looking forward, the ECB could end up keeping rates on hold for all of 2026. I don’t think mortgage rates will change much more over the coming months.
However, Mr Cassidy said that given Revolut’s plans to enter the Irish mortgage market later this year, this could also put further downward pressure on current rates.
