Recent data from the Central Bank of Ireland show that the average interest rate on new Irish mortgage agreements fell to 3.48% in May 2026, down two basis points from April and 13 basis points over the year.

For the first time since March 2023, Irish mortgage rates now match the euro area average, a notable shift after several years of sitting above it. Ireland’s rates are currently the 12th highest in the 21‑country eurozone, down from 10th place in April.

The Irish Examiner highlights that this change reflects a gradual increase in competition in what has been a highly concentrated mortgage market, particularly following the exit of KBC and Ulster Bank. Pillar banks have dominated new lending in recent years, but the arrival of new non‑bank lenders, including international players and credit unions, along with the planned takeover of PTSB by Austrian‑owned BAWAG, is expected to further intensify competition for prospective borrowers.

Despite this downward trend in mortgage rates, broader interest‑rate policy remains in focus. The European Central Bank recently raised key rates, including the main refinancing rate in response to higher‑than‑target inflation, and future decisions will continue to influence Irish lending costs.

Lending volumes remain robust. The Central Bank reports that the value of new mortgage agreements reached €953 million in May, an increase of €10 million compared with the same month last year. This suggests that, while borrowers remain sensitive to affordability, improved mortgage pricing and ongoing demand are helping to sustain activity in the market.

On the price side, the latest figures from the Central Statistics Office (CSO) show that residential property prices nationally rose by 6.2% in the year to May 2026, unchanged from April. This annual increase is the lowest rate of growth since February 2024, when the annual rise was also 6.2%, indicating a gradual moderation after several years of sharper increases.

The median price of a home purchased in the year to May now stands at around €395,000, reflecting continued upward pressure despite the slower pace of growth.

Outside the capital, property prices rose by 7.3% over the same period, underscoring the continued shift in buyer demand towards regional and commuter locations.

Key drivers include:

• Improved transport links and infrastructure.

• The rise of remote and hybrid working, making location more flexible.

• The relative affordability of larger homes outside Dublin.

For many buyers, especially families and second‑time purchasers, regional markets offer better value for money; more space, gardens and amenities at price points that remain below equivalent Dublin homes. This dynamic is sustaining demand across commuter towns and regional centres.