Joanna Fitzpatrick (QFA)

Headline Overview

Ireland’s mortgage market continued to expand in 2025, with total lending reaching €14.5 billion, a 15% year‑on‑year increase. Of this, €12.3 billion related to loans for house purchase, while €2.2 billion was for top‑up and re‑mortgage activity, underlining a healthy mix of new buyers and existing borrowers reshaping their finances.

The average new mortgage rose by around 7% to €332,000, largely reflecting ongoing house price growth rather than a surge in buyer incomes. Overall, 2025 delivered what industry commentators describe as a “buoyant” housing and mortgage market, with solid completions and strong drawdowns going into 2026.

For borrowers, the Irish mortgage market in 2026 is expected to remain competitive and broadly favourable, with stable rates, strong policy supports, and continued appetite from lenders to write good‑quality business.

Where Activity Is Coming From

First‑time buyers in the driving seat.

Lending volumes on newly built homes rose by about 14% to roughly 13,400 loans in 2025, reflecting increased output and strong demand for new stock. By contrast, lending on existing homes fell by around 2%, marking the third consecutive year of decline in that segment.

The market is now decisively dominated by first‑time buyers (FTBs):

FTB lending volumes rose by about 5.4% to 27,650 in 2025.
FTBs now account for close to three‑in‑four new mortgage loans, or roughly 60%–70% of drawdowns depending on the period measured.

In contrast, mover‑purchaser activity continues to soften:

Lending volumes to mover‑purchasers fell by around 2.7% to 8,782, their lowest level (outside the Covid‑19 period) since 2014.

The pattern is clear: FTBs, supported by State schemes and strong lender appetite, are underpinning the market, while many existing owners appear reluctant to trade up or down. A key reason is the risk of selling before securing a suitable next home in a market where supply remains tight.

What this means for you:

If you are a first‑time buyer, you are in the “core” segment of the market with strong policy and lender support.
If you are a mover, the environment is still positive, but planning and timing your sale and purchase remain critical.

House Prices and Rate Environment

Price growth still positive, but moderating.

Recent data show national house prices rose by around 7–7.4% year‑on‑year to late 2025.

Growth remains uneven across the country:

Dublin: approximately +5.3% year‑on‑year
Outside Dublin: approximately +9.2% year‑on‑year

Analysts expect this pace to moderate to roughly 3–5% in 2026, as stretched affordability and tighter borrowing capacity begin to cap further rapid increases. Prices, however, are still rising rather than falling, particularly where supply remains constrained.

Mortgage interest rates

Mortgage rates have eased down from their recent peaks and are expected to remain relatively stable through 2026, with lenders more likely to make incremental adjustments than sweeping cuts or hikes.

Fixed rates: broadly in the 3%–5% range, depending on loan‑to‑value (LTV), fixed term, and property BER rating.
Variable rates: typically around 3.12%–4.85%, but these can change based on market rates (Euribor) and lender decisions.

What this means for you:

Affordability is still under pressure from higher prices, but rate stability makes planning easier.
Fixed rates remain attractive for borrowers seeking certainty, particularly FTBs and switchers coming off older higher‑rate products.

Supply, Demand and Government Response

Supply remains the key challenge.

Supply continues to be the critical pressure point in the Irish housing market. While new‑build completions have improved, experts warn that supply still lags underlying demand, particularly in key urban and commuter areas. To address this, Budget 2026 allocates a record €11.275 billion to the Department of Housing, Local Government and Heritage, marking a roughly 20% increase in funding.

This includes:

About €7.21 billion in exchequer funding,
Over €9 billion in total capital investment once the Land Development Agency (LDA) and Housing Finance Agency (HFA) funding are included.

A significant share of this capital is earmarked for:

New social housing
Affordable purchase and cost rental schemes
Measures to tackle vacancy and dereliction, including expansion of the Vacant Property Refurbishment Grant and related initiatives.

Tax and planning measures, such as targeted changes to land value taxation and capital gains tax on development land, are also aimed at incentivising new construction.

Bottom line: Government is investing heavily to increase supply, but the practical impact will take time to filter through the system.

Strong Supports for First‑Time Buyers

As of early 2026, key schemes include:

Help to Buy (HTB)
- Provides an income tax and DIRT rebate of up to €30,000, capped at 10% of the purchase price, on eligible new‑build homes up to €500,000.
First Home Scheme (FHS)
- A shared equity scheme where the State and participating lenders can provide up to 30% of the price of a new home in return for an equivalent equity stake.
- FHS and HTB can be used together, but the combined support is capped at 30% of the purchase price.
Local Authority Affordable Purchase Scheme
- Helps FTBs and qualifying “fresh start” buyers on moderate incomes purchase new‑build homes at a discount, with the local authority taking an equity share equal to the discount.
Help to Buy Tenant Home Purchase Scheme
- Assists eligible tenants who receive a Notice of Termination to purchase the home they currently live in, where certain conditions are met.
Vacant Property Refurbishment Grant
- Offers up to €50,000 to refurbish a vacant property and up to €70,000 for a derelict property, with higher limits in some offshore island cases.
Local Authority Purchase and Renovation Loan
- An extension of the Local Authority Home Loan for FTBs who were unable to secure mainstream finance and who qualify for the Vacant Property Refurbishment Grant. It can fund both purchase and renovation of a derelict or uninhabitable home.

What this means for you as an FTB:

There has never been more targeted support for eligible first‑time buyers.
Combining schemes (for example, HTB + FHS, or grants + local authority loans) can dramatically improve affordability – but the rules are complex, and advice is essential.

Switchers and Home Movers

Switching activity remains strong!

The switcher segment has become increasingly active as borrowers:

Roll off older, higher fixed rates,
Benefit from higher property values,
Complete BER upgrades and seek green rate discounts, or
Look to release equity for renovations or other needs.

Lenders continue to compete for this business with keen rates and, in some cases, cash‑back incentives (though these have been scaled back by some providers compared with previous years).

Recent regulatory changes are also making switching smoother:

The Consumer Protection Code 2025, due to take effect from 24 March 2026, introduces a new rule requiring mortgage providers to release title deeds within 10 working days of a request, subject to limited exceptions.
This directly addresses one of the key bottlenecks that has historically slowed down switching.

According to BPFI, around 60% of mortgage switching in 2025 was completed via brokers, representing just over €1 billion in value, underlining the importance of whole‑of‑market advice.

For existing borrowers:

Now is a good time to review your rate, especially if you’re approaching the end of a fixed period.
A broker can assess if switching or refixing could reduce your repayments, shorten your term, or help fund improvements.

Key Takeaways for 2026 Borrowers

The mortgage market is growing and competitive, with strong FTB activity and solid support for switchers.
House prices are still rising, but the pace is expected to slow to 3–5%, easing pressure at the margin.
Rates have stabilised in the 3%–5% range for many fixed products, giving borrowers clearer visibility over future repayments.
Government is investing heavily in supply and maintaining robust buyer supports, especially for FTBs and those tackling dereliction and vacancy.
Regulatory changes (including faster title deed release) are making it easier for borrowers to switch and shop around, with brokers playing a central role.

Ready to take the next step?

Whether you’re a first-time buyer, subsequent buyer or a switcher; our role at Irish Mortgage Corporation is to back you at every step. There is no fee for advice, and if anything needs to change (savings pattern, loans, PRA), you will have time to sort it before your case goes to a lender. A mortgage is a journey, and I’m here to guide you through every step.

If you’d like help working out where you stand, I’m here and ready to talk. Book a chat with me today and start getting mortgage ready today.