Whether you have a mortgage or are taking out a mortgage to purchase a home, the interest rate you select is hugely important. Interest adds no value to your mortgage so if you are paying more than you should it is a needless cost that you are just paying over to the bank.
To avoid paying needless interest it is important that you do your research or work with a broker such as doddl who offer lowest market rates.
There are now 12 mortgage lenders in the Irish market, so if you go to just one lender then chances are you are not getting the best rate.
If you go to one lender they will tell you their rates but they wont tell you the bank on the next corner has lower rates – at doddl we will as we can access all major lenders and our role is to find you the best rates and terms. We work for you as our client, not the bank.
What is the lowest mortgage interest rate in Ireland right now?
The lowest mortgage rate available in Ireland today is a 3% fixed rate. There are two lenders offering this rate, one as a Green product (if your BER is A) and the other if you have a lower loan to value of 60% of lower.
The lowest variable rate is a 3.75% variable rate.
Outside of Green rates and lower loan to values, the lowest standard rate, regardless of BER and available up to 90% finance is 3.45% for mortgages over €250,000.
Fixed rates are set for a period of time e.g. 3 year fixed would mean your repayments remain the same for 36 months. Variable rates mean that your rate can increase or decrease based on general market forces, at the discretion of your mortgage lender. Short term fixed rates are more popular with the Irish consumer.
Rates are tiered mainly in three different ways right now depending on your –
Loan to value – this is your mortgage divided by the value/purchase price of your home e.g. mortgage €405,000 on purchase price €450,000 would be 90% loan to value.
Building Energy Rating (BER) – green rates are some of the lowest on market and available whereby your BER is A or B rated.
Mortgage Amount – some lenders offer what’s called high value mortgage (HVM) rates for mortgages over €250,000.
The lowest rates are available to those with a high building energy rating, lower loan to values or mortgage amount over €250,000. All lenders have different rates some focus on lower loan to value mortgages (reduces their overall risk if you have more equity in your home), some are very much focused on the Green energy space and others offer a discount on larger mortgage balances.
Finding the best rate for you may come down to a combination of factors all of which our mortgage specialists at doddl can help with.
Will Irish mortgage interest rates continue to drop?
After two years of upward movement on rates, 2024 brought welcome rate cuts, many banks have now reduced their rates by 1.5% through 2024 and into 2025.
No-one wants to pay more than they need to on their mortgage and so a common question is will rates continue to drop.
My answer would be that lenders who are offering rates at the higher end of the scale (over 6%) should certainly be in a position to cut rates as their funding costs continue to drop. These rates are already far too high in the current rate environment.
The lenders offering rates at sub 3.5% may not cut rates to a great extent in the near term, these rates have already come down quite considerably in the last 12 months. However we will most likely see lenders tweak certain rates to remain competitive but I don’t think we can expect mass cuts across all lenders and products.
Will the ECB rate cuts impact my mortgage rate?
Many people ask if ECB rate cuts will result in a drop to their rate or rates in general.
While tracker mortgages are directly linked to the ECB refinancing rate, those without a tracker rate or new mortgage customers may not see the benefit of further ECB rate cuts.
Banks fund new mortgage lending in two ways either on money markets or via markets and deposits which they hold from savers.
The Euribor is the rate at which banks can obtain funds to lend so it is the Euribor rate that impacts the vast majority of mortgage holders interest rates.
Inflation, geopolitics, supply and demand are all factors that influence Euribor rates.
The rate a bank will lend at depends on their cost of funds plus a margin on top of that to allow for costs such as operating costs, impairment and capital reserving costs.
Whether rates in Ireland will drop further is impacted by the Euribor rate. If we look at the 12-month Euribor which implies a floor of just over 2% by December 2025 plus take an average margin added by lenders of 1-1.2pc this would mean average rates would stand at just over 3%.
Those expecting rates to fall to the low levels pre 2022 may not see this come to pass. The sub 2% rates are unlikely to return in the near future and the norm for interest rates in the short term is likely to be closer to the 3pc level.
How to get the best mortgage rate in Ireland?
There are now 12 mortgage lenders in the Irish mortgage market, all offering different interest rates and mortgage levels.
The only way to get the best mortgage for your needs is to do your research or get market based advice from a broker such as doddl.
You don’t need to know everything about mortgages because we do and our service is free.
We work for you to get the best mortgage and terms across all major lenders that we work with.
We don’t charge you because we get paid by the bank you choose to take your mortgage with. This payment is the same regardless of lender you choose and it is instead of the banks having their own staff and offices costs to get mortgage business in, we are effectively a distribution channel for the banks.
So by using doddl you are getting access to all major lenders, specialist mortgage advisors and someone supporting you throughout, all at no cost to you – win, win!
We can also access lenders that you cannot deal with directly, broker only lenders such as new lenders MoCo and Nua Money.
Need Advice on rates and mortgage approval, just ask!
Purchasers start here – Need a Mortgage to buy a Home
Switchers start here – Want to review my current mortgage rate
