Irish Banks’ Mortgage Market Bucks the European Trend: Mortgage Rates (Part II)

DBRS Morningstar has the second part of a series of commentaries analyzing the Irish mortgage market.

Key highlights include:

• Irish banks experienced a significant increase in mortgage lending while maintaining mortgage rates relatively stable
• Mortgage rate performance may be attributed to a change in the Irish banking landscape with some traditional players exiting it and some new fintechs entering.
• Fixed rate loans have become increasingly popular among borrowers as interest rates continue to rise and they are experiencing, together with high inflation, a subsequent decrease in purchasing power
• Since Irish banks enjoy a large, sticky and cheap customer deposit base, which is currently growing with the former clients of KBC and Ulster Bank, they are well positioned to prioritize customer acquisition over rate increases

“Although a significant part of Irish borrowers will need to refinance their fixed term loan in coming years, we consider borrowers are better positioned to face an increased cost in mortgages, than a few years ago” said Maria Jesus Parra, Vice President, Global Financial Institutions at DBRS Morningstar.