Will our mortgage rates fall?
Mortgage-holders can at last look forward to some relief in 2024 after 10 mortgage hikes from the European Central Bank in a brutal series of blows over the past year and half.
The chairman of the Association of Irish Mortgage Advisors (AIMA), is upbeat as the new year unfolds.
Trevor Grant said: ‘We appear to have reached the peak of ECB interest rates increases, and we would hope to see rate cuts in 2024.’
However, Joey Sheahan, head of credit at online brokers MyMortgages.ie, wasn’t so sure when these cuts might take place.
‘There is division in the forecasts as to whether or not the ECB will reduce rates in the coming months, with the ECB notably signalling that they won’t. While it’s very likely that rates will come down at some stage this year, it doesn’t mean that mortgage lenders will pass any cuts on to their customers, mainly because they have not yet passed on the full amount of the 10 ECB rate hikes.’
This is not the case, though, with lenders that sourced their funding from the money markets directly – rather than from deposits – and were particularly hard hit.
Mortgages with Finance Ireland and ICS Mortgages have risen astronomically but the easing of interest rates ‘should enable them to compete more with the pillar banks this year,’ said Mr Grant.
‘The average interest rate on new Irish mortgages [also] continues to ease,’ he said. And December 2023 has seen the welcome arrival of mortgage provider MoCo (owned by Bawag Bank in Austria). Nua Money, another non-bank lender, is expected to enter the Irish market by the end of March, adding much-needed competition.
Mr Grant stressed that 100,000 mortgage holders are on lower fixed rates that will expire within the next 12 months ‘and who are therefore facing a significant financial shock’.
‘While the mortgage deals available from lenders aren’t as good as they were before interest rates started to rise, there are still options and very good value out there which can help borrowers bring down the cost of their mortgage bills,’ Mr Grant said.
Mr Sheahan advised: ‘We have rates as low as 3.65% fixed for four years with €2,000 cashback… based on a house with a BER of B3 or better.’