Lending collapses as consumers tighten budgets – Independent.ie

MORTGAGE and personal borrowing collapsed in April as consumers reacted to the spread of the virus by tightening their budgets.

his was despite a new fall in mortgage rates that mean Ireland now has the third highest rates compared with the rest of the Eurozone.

The latest Central Bank figures show that was a massive drop in lending in April.

New mortgage loans fell by 40pc in the month to €407m.

Some banks have been withdrawing mortgage loan offers after people temporarily lost their jobs.

This is despite them getting mortgage approval in principal from a bank prior to the Covid-19 crisis.

And consumer loan levels fell to just €64m in April. There was a fall of €119m in April compared with the previous month.

The shock of the pandemic stopped household borrowing, leading to a 65pc decrease in consumer lending volumes compared with the same month in 2019.

“This is the lowest level of new consumer loan agreements since the series began, after declining by €119m compared to the previous month,” the Central Bank said.

Statisticians said the rates charged on new mortgages fell again in April.

This country had been the most expensive for new mortgages until recently, but now Latvia and Greece are more expensive.

High mortgage rates in this State compared with the costs in the likes of Germany and France have been hugely controversial, especially as banks have been bailed out by taxpayers.

But the demand by regulators that banks here set aside more capital when issuing a mortgage than in the rest of the currency bloc, and the long delay in repossessing properties when no repayments are made means banks have been slow to reduce rates.

Despite that, rates have been falling for months now.

Deputy Central Bank Governor Ed Sibley recently accused banks here of hitting many mortgage holders with double the interest rate they need to be profitable.

Now Central Bank statisticians say the average rate on a new mortgage was 2.78pc in April, a slight fall on what was charged in the previous month.

However, this is still more than double the average in the Eurozone of 1.29pc.

“Ireland had the third highest mortgage interest rates across the euro area in April,” the Central Bank said.

The average new fixed rate in this country is now 2.7pc, a marginal fall on the March rate.

However, there has been a rise in the new variable rates charged to 3.12pc in April. Few new mortgages are taken out with variable rates, the Central Bank said.

Online Editors

Related Posts


  1. 335592 228811An attention-grabbing dialogue is value comment. I believe which you need to write a lot more on this matter, it wont be a taboo topic however normally individuals are not sufficient to speak on such topics. To the next. Cheers 648641

  2. 338813 266830Thanks for the information. And a response from you. car dealers hips san jose 558714

  3. 395029 280341I ought to test with you here. Which is not 1 thing I normally do! I enjoy studying a submit that will make people feel. Also, thanks for permitting me to comment! 880334


Please enter your comment!
Please enter your name here

Stay Connected


Recent Stories

Britons Already Worried Over Budgets as Cost-of-Living Crisis Gathers Speed – BloombergQuint

Britons Already Worried Over Budgets as Cost-of-Living Crisis Gathers Speed&nbsp

At many churches, pandemic hits collection plates, budgets – CT Post

Biltmore United Methodist Church of Asheville, North Carolina, is for sale.Already financially strapped because of shrinking membership and a struggling preschool, the congregation was...

Melton council's budgets wishlist | Brimbank & North West – Brimbank & North West | Star Weekly

The electrification of the Melton train line and upgrade of the Western Highway are among Melton council’s wishes in the state and federal budgets. The...

Performance Budgets (Budget.json)

Use a performance budget to assert thresholds for performance metrics. budget.json supports three types of budgets: Timing budgets: Assert thresholds for time-based performance metrics like...

Erin and Ben Napier of 'Home Town' Reveal the Best Upgrades for Small Budgets

Erin and Ben Napier of "Home Town" have done some massive makeovers, but these HGTV stars also know that not every homeowner can afford...