Ireland Consumer Loan Rates Drop 76 Basis Points

The weighted average interest rate on new consumer loans fell to 6.72% in July. This represents a drop of 76 basis points compared to June. Data from the Central Bank of Ireland shows this decline is driven by a shift in lending products. The average rate is also 57 basis points lower than in the same month last year. New floating-rate loans carried a weighted average rate of 7.90%. New fixed-rate loans carried a weighted average rate of 5.05%.

The total volume of new consumer loans reached 364 million euros in July. Floating-rate loans accounted for 59% of this volume. This is down from 77% in June. The change in product mix explains the significant drop in the overall average rate. Fixed-rate products now make up a larger share of new lending. This structural shift lowers the blended cost for borrowers.

Mortgage Costs Remain Stable

The weighted average interest rate on new mortgage agreements was 3.48% at the end of July. This is down one basis point from June. The rate is down 12 basis points from the previous year. The euro area average increased by 24 basis points to 3.54% over the same period. Ireland now holds the 11th highest mortgage rate in the eurozone. This is an improvement from the 12th position in June.

Fixed-rate mortgages had an average rate of 3.44% in July. This is a decrease of two basis points month-on-month. Variable-rate mortgages stood at 4.11%, up 15 basis points. The total volume of new mortgage agreements was 1.2 billion euros. This represents a 6% increase compared to the same month last year. Ninety-four percent of new mortgages were fixed-rate. This is the highest proportion recorded since December 2014.

Corporate Lending Volume Surges

Agreements for non-financial corporations increased to 3.5 billion euros in July. This marks a 124% monthly increase and a 231% yearly increase. Loans valued over 1 million euros drove this growth. These large loans accounted for 90% of all new corporate lending volume. The volume of such large loans rose to 3.2 billion euros. This is a 141% increase from June.

Household overnight deposits carried an average interest rate of 0.15%. New household deposits with agreed maturity had an average rate of 1.92%. The volume of these new agreements was 1.75 million euros. This is 13% higher than in June and 25% higher than a year ago. According to GN markets/policy (en-US), these figures reflect the current tightness in the credit market. The European Central Bank is expected to raise rates by 25 basis points soon. This decision aims to curb inflation, which stood at 3.3% in August.