Brokers Ireland, which has long called for long-term fixed interest rate mortgages in Ireland, has welcomed the introduction by Finance Ireland of a 20-year fixed mortgage for the first time in Ireland.
The organisation said it gives a “booster shot” to competition at a badly needed time when KBC and Ulster Bank are exiting the market.
“We have always maintained that mortgages are long-term products for which lenders can readily source long-term funding.
“That makes them very secure – for consumers and for lenders. That they are only now entering the Irish market indicates just how staid, unimaginative and above all non-consumer-friendly the Irish mortgage market has been. In fact 10 year mortgages have only been introduced in recent years.
“We are still paying way over the odds by comparison with euro area averages, a rate of 1.5 percent in France for a 20-year mortgage being most notable.
“The average rate for 2020 in Ireland was 2.92 percent so the rates now being offered of between 2.60 percent to 2.99 percent for fixing for 20 years are very competitive,” Rachel McGovern, Director of Financial Services at Brokers Ireland, said.
She said while there is currently no immediate prospect of the ECB raising interest rates, there is discussion in the US of interest rate rises.
“When these things turn it can often happen quickly and unexpectedly. That is why having security around what your future mortgage repayments will be – normally a household’s biggest outlay – is important and enables people to better plan their futures,” Ms McGovern added.
She said it was “terrific” that Irish mortgage holders will now have a better range of options available to them and she advised mortgage holders and aspiring mortgage holders to seek independent advice on the best options to suit their individual circumstances.