The European Central Bank lowered its key interest rates by 25 bps in January 2025
This was expected, including reducing the deposit facility rate to 2.75%, the main refinancing rate to 2.90%, and the marginal lending rate to 3.15%.
Lower interest rates will increase demand and will drive economic activity up, but inflation is still unpredictable and an influencing factor. The Euro area annual inflation rate was 2.4% in December 2024, up from 2.2% in November. A year earlier, the rate was 2.9%. The rate of inflation is still higher than they require it to be, and still off the desired level of 2%.
Mortgage rates continue to decrease but not at the level of ECB rate decreases, (except for tracker mortgages). Green/ECO mortgage rates are the lowest in the market, and we can arrange a 4-year fixed rate from 3.10%. Our Bank of Ireland ECO Mortgage rates are especially attractive for first-time buyers, switchers and house movers.
Even though ECB rates are falling, there it is still a case for fixing your mortgage rate with the stand-out rates being mainly the 4-year fixed options across the lenders, from 3.10%. Full-term fixed rates are also worth considering, and range from 3.40% to 3.80% depending on whether your loan to value is below or above 80%. Terms available are 15, 20, 25 and 30 years.
House prices remain strong, and continue to increase year-on-year due to lack of supply, making the market difficult to navigate, but we do see more deals being done in recent times despite this.