Irish mortgages were more than twice as expensive as the euro-area average in late 2021, mainly as a result of domestic banks facing higher regulatory capital demands as a legacy of the financial crisis and above-average operating costs.
The banks have also received an income boost as the ECB switched from charging them negative rates of minus 0.5 per cent on money deposited with the ECB by the banks to paying them a rate of 2 per cent as the Frankfurt-based organisation increased its main rates. The past year has also seen a surge in Irish households searching for lower fixed rates on their mortgages as they fretted about the impact of official rate hikes. The Central Bank new mortgage rates figures exclude loans where a borrower renegotiated with their existing lender to move on to a different rate.
I’d be interested to hear JimPowerEcon talk about this - Ireland already had the highest mortgage rates pre ECB rises, so maybe banks not as quick to pass on as other countries? Does that mitigate the effectiveness of rate rises here as a result as we were already high?
'Hi I'd like a mortgage, please.' 'No.' 'Why?” 'We don't have confidence you can afford €800 a month.' 'I'm renting for €1200 a month. I pay every month. I've never been late. I have a full-time job.' 'Lol. Next!' 🤷
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