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Interest rates are still the second highest in the euro zone, according to the Central Bank 
Irish mortgage interest rates continue to be the second highest in the euro zone, latest figures from the Central Bank reveal. 
The weighed average interest rate on new mortgages was 2.78 per cent in February, down 12 basis points on the same month a year earlier but more than double the EU average of 1.27 per cent. 
The average for fixed-rate mortgages, which accounted for 82 per cent of all new home loans in February, was unchanged from the previous month at 2.65 per cent. 
Variable mortgage rates stood at an average 3.41 per cent, up six basis points versus January. 
Overall, mortgages totalling €617 million were agreed in February, up 7 per cent versus the same month a year earlier and up 23 per cent compared to January. 
Renegotiated mortgages rose to €295 million in February, the highest level of renegotiations since September 2020 with the weighed average interest rate on such loans coming in a 2.84 per cent. 
Commenting on the figures, Trevor Grant, chairman of the Association of Irish Mortgage Advisors, said mortgage rates remain “stubbornly high”. 
“Ireland’s high interest rates have been a long-standing issue and whilst there are some banking and legal factors currently ensuring they will remain higher than average, there is still work that can and should be done to reduce interest rates overall. 
“Both new and existing borrowers can stand to save thousands in interest payments over the term of their mortgage. This is especially the case for existing borrowers currently on rates of between 3 to 3.5 per cent. Many can easily switch to rates closer to 2 per cent, which would lead to a significant saving over the term of their loan,” Mr Grant added. 
Brokers Ireland said Irish mortgage holders are currently paying more than double what most of their counterparts are. 
This is costing an Irish mortgage holder with a €300,000 loan over 30 years in excess of €82,000, said Rachel McGovern, director of financial services. 
“Effectively it means all new mortgages holders since the financial crash of 2008 to 2010 are paying for the fallout because Irish lenders are compelled to hold larger capital reserves,” she added. 
Given Irish lenders have now offloaded the majority of their bad loans, it is questionable why lenders are still required to hold such reserves, Ms McGovern added. 
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