Mortgage Interest Rates
Dail Éireann — 2025-12-18
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Simon Harris (FG), Wicklow

The more competition in the banking sector and the ability to have competition across the EU is how we can help in a sustained and policy proactive way. A number of discussions that are taking place at a European level about completing the single market in relation to that is good. Making sure this is an attractive location in which to operate banks and financial services is also important and important to consumers, including the people the Deputies mentioned. It is important, though, when we have this conversation to recognise that we are having it at a time when the weighted average interest rate on new mortgages is falling. It is 0.5 % lower than it was at the same time last year. The Deputies are right that these are real figures and have real impacts on people. The latest data from the Central Bank, which publishes quarterly data on interest rates on outstanding mortgages, is from September of this year and indicates that the average interest rate on outstanding mortgages held by banks was 3.44%, down from 3.6% a year earlier. For the overall non-bank sector the weighted average was 3.78%, down from 4.39% a year earlier and for those entities in the non-bank sector, which do not engage in new lending, the weighted average was 3.91%, down almost 1.5% from 5.32% a year earlier. The Central Bank has indicated that Irish banks operate at a healthy profit level, but that gap with the EU average has narrowed more recently.
Domestic banks currently maintain healthy balance sheets. We need them to do so in order that they are well positioned to absorb potential credit losses in case of adverse shocks. We know what it was like when the banking sector collapsed in the past and the pain that caused. As announced in the recent budget, the revised form of a bank levy was further extended. Extending the bank levy in increments of one year at a time ensures the form, scope and revenue target of the levy can be assessed and calibrated on an annual basis in a manner that accounts for various factors, including the level of profitability of the sector from year to year and the performance of the liable institutions relative to one another and that is also a tool at our disposal.

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Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/dail/2025-12-18/debate/main
Retrieved: 2026-08-14T04:54:29+00:00
Sitting date: 2025-12-18