Mortgage holders here still paying double Euro average

But there is scope for much deeper cuts, mortgage experts said.

New figures show home buyers here with new mortgage agreements are still paying double the average rate in the rest of the Eurozone despite the fall in rates.

The average rate paid on a new mortgage in this country was 2.88pc in December, the Central Bank said.

This was down 13 basis points on the same month in the previous year.

However, the average rate being paid in the Eurozone is half of the one in this country, at 1.37pc.

There was a bigger fall in fixed rate mortgage deals, with a drop of 12 basis points to 2.81 in December when compared with the same month a year previously.

Mortgage experts said there was scope for lenders to cut their rates again.

Rates are coming down due to more competition between lenders, according to Joey Sheahan, head of credit of MyMortgages.ie and author of ‘The Mortgage Coach’.

“But there is still a gulf between what our lenders are charging and what our European counterparts are offering their mortgage holders.

“We would hope that this gulf will continue to narrow over the coming years. We believe that there is scope for a cut of up to 0.25pc on some fixed rate terms,” he said.

Last month Ulster Bank reduced its five-year fixed rate to 2.2pc for those borrowing more than €300,000.

This is the lowest mortgage rate in the market.

And recent entrant into the mortgage market, ICS Mortgages, reduced its three and five-year rates for first-time buyers, movers and switchers.

Other banks are now expected to react with lower rates.