OREANDA-NEWS. The Central Bank of Ireland has published the Retail Interest Rate Statistics for March 2016.

A selection of fixed and floating Buy-To-Let (BTL) mortgage rates for are shown in Chart 1.   All BTL mortgage rates have declined over the year ending Q1 2016.  The sharpest fall was observed for BTL rates fixed for over 3 years, which declined by 65 basis points to 5.36 per cent over the year ending Q1 2016.  Variable mortgage rates for BTLs also declined, falling by 26 basis points to 4.9 per cent over the year to end-Q1 2016.

In terms of Principal Dwelling House (PDH) mortgage rates, the sharpest decline was observed for standard variable or LTV variable rate mortgages, which fell by 49 basis points to 3.64 per cent over the year ending Q1-2016 (Chart 2).    Fixed rate PDH mortgage rates also declined, with rates fixed for 1-3 years falling by 34 basis points over the same period. PDH mortgage rates across all instrument categories have declined over the 12 month period ending in the first quarter of 2016.

During the fourth quarter of 2014, 61 per cent of new business mortgages were variable interest rate products.  The ratio of fixed versus variable rate mortgages shifted to an approximate 50-50 split from Q2 to Q4 2015 (Chart 3). However, during Q1 2016 52 per cent of new business drawn down mortgages were at variable rates.  In general, the changing composition of new mortgages reflects the preference for cheaper fixed rate products currently on offer from domestic banks.

In March 2016, the volume of renegotiated loans for house purchase stood at circa €432m, a decrease of €462m since October 2015, when renegotiations peaked at almost €894m (Chart 4). In general, the majority of renegotiated contracts reflect normal market behaviours such as switching between various mortgage products offered by retail banks.  Renegotiated interest rates for house purchase loans decreased by 39 basis points to 3.1 per cent during March 2016.

The rate on new floating rate loan agreements  for house purchase (which includes renegotiations) was 3.16 per cent at end-March 2016, representing a decrease of 7 basis points over the month. The equivalent euro rate was 1.89 per cent (Chart 5).

In general, interest rates on household term deposits have continued to decline in March 2016 (Chart 6).   Rates on new business household deposits decreased by 3 basis points to 0.18 per cent at end-March 2016.    The corresponding euro area interest rate fell by 1 basis point to 0.62 per cent over the same period.   New business NFC term deposits remained unchanged over the month at just 0.07 per cent.    However, NFC term deposits in the euro area fell by 8 basis points to stand at 0.18 per cent at end-March 2016.