Mortgage holders will get a reprieve as interest rates won’t be hiked this year and probably won’t be increased through next year either. Stock image

Mortgage interest rates in this country are no longer the highest in the Eurozone.

The latest figures show homeowners continue to pay more than the typical cost for a mortgage in other eurozone countries.

This country has fallen into second place following a rise in rates in Greece.

But at 3.04pc for the average new mortgage, rates in this country in November were still much higher than the Eurozone’s average of 1.79pc, according to new figures from the Central Bank.

This means that a family borrowing €250,000 over 25 years will end up paying €156 more a month than their counterparts in other countries in the currency zone.

Over a year this works out at a cost of almost €2,000.

The Central Bank said: “As a result of an increase in rates in Greece, Ireland had the second highest average interest rate across the euro area on all new mortgages agreed in November, at 3.04pc.

“The rate varied considerably across countries, with the average for the euro area being 1.79pc.”

Last month it said we had the highest rates in the Eurozone.

Recently European Central Bank president Mario Draghi blamed a “quasi-monopoly” among banks here for the high rates. Mr Draghi was addressing an Oireachtas Committee.

Bank of Ireland and AIB dominate the market.

The high mortgage rates are combining with a scarcity of properties for sale to price more new buyers out of the market, experts said.

It had been expected that the European Central Bank would raise its key interest rate later this year.

But poor economic figures in both France and Germany, along with fears Italy may already be in recession, have led many to question the likelihood of a rate rise.

The end of the summer had been suggested by the ECB as a likely date for a raising of the key lending rate which is currently 0pc.

But most private sector economists now doubt the ECB will hike rates as planned. Some expect a rate rise in 2020, and some say it will not be able to raise interest rates before the next downturn hits Europe.

Higher Eurozone rates would impact on existing and new mortgage holders with tracker and variable rates, but not those who are locked into a fixed rate.

Meanwhile, the Central Bank said the interest rates being paid by banks here on new household deposits remain low in November. The average paid for deposits is just 0.04pc. This is lower than a year ago.

The equivalent Eurozone deposit rate is 0.33pc.

Online Editors