Mark Kelly (QFA)

If you are concerned about the mortgage market and the recent announcements from the ECB and lenders or simply trying to make sense of rates, house prices and supply, then this Q2 update is for you.

Whether you are a first‑time buyer, mover or switcher, the trends this quarter will shape how much you can borrow, what you pay, and where you may need to look for your next home.

Who is buying: first‑time buyers remain in the driving seat

Mortgage approvals data continue to show that first‑time buyers (FTBs) dominate new lending.

In early 2026, around 60% of approvals were for FTBs, with mover‑purchasers making up less than 20% – their lowest share since 2014 (excluding Covid years).
Switching and remortgage activity remains important but is more sensitive to rate changes and lender incentives.

Under Central Bank rules, most FTBs can borrow up to 4 times gross income, while second‑and‑subsequent buyers are capped at 3.5 times. Exceptions are limited each year, and using an exception to go above 4x can rule out schemes like the First Home Scheme.

One notable Q2 development is the emergence of more flexible lending from newer players:

Núa Money has announced products allowing certain first‑time buyers to borrow up to 5 times income, subject to affordability and other criteria.

While this can help some buyers bridge gaps in higher‑priced areas, it needs to be weighed carefully against long‑term affordability and how it interacts with Government schemes.

Who this affects

FTBs: More options on the lending side, but continued reliance on HTB/FHS and strict loan‑to‑income limits.
Movers and switchers: Still constrained by 3.5x income caps, making equity and savings crucial in trade‑up decisions.
All borrowers: Need to understand how any exception or higher multiple may affect eligibility for schemes and long‑term repayments.

ECB rate increase: impact on trackers, variables and upcoming fixes

The most significant macro development in Q2 was the ECB rate increase.

As of mid‑June 2026, the ECB’s main refinancing rate stands at 2.40%, with the deposit facility at 2.25% and marginal lending at 2.65%.
The June decision raised the refinancing rate by 0.25 percentage points, and ECB policymakers have signalled the possibility of up to two further increases before year‑end if inflation does not move back towards target.

The ECB uses interest rates as a key tool to manage inflation. When inflation runs above target driven by energy costs and broader price pressures, higher rates are intended to cool demand, moderate borrowing, and bring inflation back down.

Tracker mortgages

For tracker customers, the impact is immediate:

Tracker rates rise in line with the ECB, so a 0.25% increase in the ECB rate means a 0.25% rise in tracker mortgage rates.
On a €300,000 mortgage over 25 years, that kind of increase can add roughly €35–€40 per month, or around €444 per year.
If the ECB delivers further hikes, tracker repayments will continue to move up automatically.

This is why many long‑time tracker holders are now asking whether it might be time to compare their tracker with modern fixed‑rate options, rather than assuming the tracker is always best.

Variable rate mortgages

Variable‑rate borrowers do not see automatic changes, but:

Higher ECB rates increase funding costs for banks.
Over time, this can translate into higher variable mortgage rates, even if not every ECB move is passed on immediately.

If you are on a standard variable or LTV‑linked variable rate, Q2 is a good time to:

Check your current rate.
Compare it with competitive fixed or green rates.
Consider whether switching could reduce risk and monthly cost.

Fixed rate mortgages

Borrowers currently on a fixed rate are protected from immediate changes:

Your rate does not move during the fixed term, regardless of ECB decisions.
However, if your fixed rate is due to expire in the coming months, the new rates available when you re‑fix or revert could be higher than when you last locked in.

Several lenders have confirmed that their existing fixed rates remain unchanged after the June ECB move, but history suggests that at least one main pillar bank is likely to adjust pricing as funding costs evolve, often followed by others once the initial publicity fades.

Who this affects

Tracker borrowers: Face direct increases and should actively compare tracker vs fixed options.
Variable borrowers: At risk of future rises and should review whether a switch or fix could help.
Fixed borrowers with terms ending: Need to plan ahead to avoid being rolled onto a more expensive variable rate by default.

House prices and supply: still tight, but changing shape

Across Q2 2026, the overall picture remains familiar: demand continues to outstrip supply, and that imbalance is keeping prices elevated.

Nationally, prices are still rising year‑on‑year, though growth in the major cities has begun to stabilise, reflecting affordability limits at current levels.
Outside the main urban centres, particularly in rural and commuter counties, prices are growing more quickly.

This is largely because many homes in Dublin and other cities now sit well above the €500,000 threshold for schemes like Help to Buy (HTB) and the First Home Scheme (FHS). That pushes first‑time buyers towards commuter counties such as Louth, Meath, Kildare and Wicklow, and further afield, where prices are still high but more likely to fit within scheme limits.

New‑build and “turnkey” properties with high BER ratings continue to command a premium, as buyers factor in long‑term energy costs and the availability of Government supports that apply only to new homes.

Who this affects

First‑time buyers: Competition remains strongest in the new‑build segment and in commuter counties where HTB and FHS can still be used.
Movers: Supply of second‑hand homes remains constrained, particularly in established urban areas, making it harder for movers to trade up or down.
Investors: Higher prices and tighter yields, especially on higher‑priced properties, require more careful analysis.

First‑time buyers: higher rates, but still options

For first‑time buyers, the ECB move and broader rate environment make affordability more challenging:

Higher rates can:

Increase monthly repayments.
Reduce borrowing capacity.
Raise the overall cost of homeownership.

But there are still supports and competitive products:

HTB and FHS continue to play a major role in bridging deposit and affordability gaps, particularly for new builds within price ceilings.
Lenders remain keen to attract good‑quality FTBs and offer fixed and green rates that balance value and certainty.
New entrants like Núa Money offer more flexible income multiples in certain cases.

In this environment, professional advice is crucial to:

Understand what you can truly afford.
Choose between schemes and lender offers.
Structure your mortgage so it is resilient to future rate moves.

Switchers and remortgagers: is now the time to act?

ECB changes are also a clear prompt for switchers (existing borrowers considering a move):

Switching can potentially:

Reduce your interest rate.
Lower monthly repayments.
Secure a fixed rate for 3–5 years of certainty.
Save money over the life of the loan.

Even small rate reductions – for example, moving from 4.0% to 3.5% on a sizeable balance – can produce substantial long‑term savings. Q2 also saw continued availability of cashback offers from some lenders, which can help offset legal and valuation costs when switching.

Who this affects

Switchers: Especially those who have not reviewed their mortgage in several years or who are sitting on older variable or higher fixed rates.
Borrowers with top‑up or home improvement loans: May benefit from refinancing high‑cost credit into a lower‑rate mortgage, where appropriate.

How Irish Mortgage Corporation can help

In a quarter where rates, prices and lending rules all matter, having a broker in your corner can make the difference between reacting to headlines and making informed decisions.

Working with Irish Mortgage Corporation means you can:

Access multiple lenders through one application process.
Compare rates and mortgage products side by side – tracker, variable, fixed and green.
Understand and navigate schemes such as Help to Buy and the First Home Scheme, including how exceptions and new lenders like Núa fit into the picture.
Review your position if you are coming to the end of a fixed rate, currently on a variable or tracker, or considering switching.
Make decisions based on your individual goals; whether that is buying, moving, switching or simply securing more certainty around future repayments.

Next steps: take control of your mortgage in Q3

If you are:

A first‑time buyer trying to understand what you can afford and which schemes apply.
A second‑time buyer or mover dealing with tight supply and trade‑up decisions.
A switcher or remortgager wondering if your current rate is still competitive.
A tracker or variable borrower concerned about the ECB’s next moves.

now is the time to act, not to wait and hope.

Contact me on

For a free consultation to review your options and start taking control of your finances, you can contact me:

Phone: 01 669 1053

Email: markk@irishmortgage.ie

I will guide you through the mortgage journey; from initial review and application right through to drawdown, helping you navigate Q3 and beyond with a clearer plan and greater confidence.