Mortgages: What Are the Best Rates in the Market Today and What Can We Expect Over the Next 3 Months? 

As of October 2024, the mortgage landscape in Ireland continues to evolve, with significant implications for both new and existing homeowners. We’re seeing shifts across the fixed, variable, and tracker mortgage spaces as the European Central Bank Rate (ECB) changes. Let’s dive into what this means for you as a borrower and what you can expect in the near future. 

Current Mortgage Rates and Best Deals 

At present, Bank of Ireland, PTSB and Avant are offering some of the most competitive fixed rates on the market. Competitive fixed rates are suited to those looking for stability in their monthly payments over a set period, as it provides a hedge against potential future rate increases. 

On the variable rate side, AIB, EBS and Haven Mortgages are offering the most competitive variable rates on the market. Variable rates fluctuate with the ECB rate, meaning that when the ECB lowers or increases its rates, borrowers on variable mortgages will see immediate changes in their repayment amounts. While variable rates can be higher than some fixed-rate options, it provides flexibility for those who may benefit from future rate reductions. 

Impact of ECB Rate Changes on Mortgages 

If inflation continues to stabilise, the ECB is expected to lower its rate in the coming months. This could provide welcome relief, particularly for those with tracker mortgages, as their repayments will immediately reflect this reduction. 

For those on variable rates, the benefits will also become apparent fairly quickly, as banks adjust their variable offerings in response to ECB rate changes. However, for fixed-rate borrowers, any reductions in ECB rates will not have an immediate effect on their existing loan terms. But it does mean that if you are nearing the end of your fixed-rate term, future fixed-rate offers could be more favourable. 

What to Expect Over the Next 3 Months 

If the ECB reduces its base rate, we can expect Irish lenders to follow suit, especially in the variable and tracker mortgage markets. This should, in turn, make mortgages more affordable for new buyers and existing homeowners seeking refinancing or top-up loans. 

For fixed-rate mortgages, however, the impact may take longer to filter through. Fixed rates are influenced by the longer-term outlook on interest rates, so while an ECB rate drop could signal some easing, it may not immediately result in significantly lower fixed-rate offers. Borrowers locking in fixed rates now may still be securing rates slightly higher than those available in early 2025. 

New Players in the Market: Nua Money 

A fresh face in the Irish mortgage market, Nua Money officially entered the scene. Positioned as a niche lender with more relaxed lending criteria than traditional banks, they are targeting higher-income borrowers or those seeking quicker approval processes. Nua Moneys current mortgage interest rates are not the most competitive when comparing to the pillar banks. 

While their rates may seem less competitive at first glance, Nua Money could be an appealing option for individuals who might struggle with the stricter lending policies of mainstream banks. This lender may also serve high-income earners looking for additional mortgage top-ups or those with urgent borrowing needs that require faster processing times. 

Key Considerations for Mortgage Borrowers 

As the ECB rate is expected to decrease, borrowers should keep a close eye on the mortgage market over the coming months. Here are a few key takeaways: 

1. Tracker mortgage holders will be the first to benefit from an ECB rate reduction. 
2. Variable mortgage holders should also see savings but may want to compare their rate against current fixed-rate options to find the best deal. 
3. Fixed-rate borrowers nearing the end of their term should monitor the market, as future fixed-rate offers could become more favourable. 
4. New borrowers might consider waiting for more favorable fixed-rate offers if possible. 
5. Nua Money offers a new, more flexible lending option, but their higher rates might only be suitable for certain niche borrowers. 

Whether you’re a new buyer, remortgaging, or looking to top up your existing mortgage, now is the time to review your options closely. 

Source:  ECB