2025 was a year of significant change in the Irish mortgage market with reduced rates, a lender exiting the market, new products being introduced and mortgage approval figures reaching record highs.
What can we expect in 2026?
Interest rates & lenders
2025 was firmly a year of rate cuts with the lowest rate on the market now sitting at 3%.
The European Central Bank held steady at its December meeting, having cut rates by a cumulative 200 basis points since the start of last summer.
ECB policymakers are now delivering a consistent message that the easing cycle is over for now and reviews unlikely until mid-2026.
As a result, there is an expectation that 2026 will bring a year of rate stability with lenders making selective adjustments to remain competitive rather than engaging in any widespread downward pricing cycle.
We have seen two lenders decrease some fixed rates and one lender increasing fixed rates already in January.
One of the more notable developments in 2025 was the launch of a new a variable product tracked to the 12-month Euribor, with a fixed margin set at drawdown. Introduced by Avant Money it is by far the lowest variable rate in the market, with next best 0.63 percentage points higher.
This marks the first meaningful alternative to fixed or standard variable rates since tracker mortgages were withdrawn in 2008.
However, there remains a wide disparity on rates across the market with rates ranging from 3% to 6.15%.
Fixed rates remain lower than variable rates and continue to be the preferred product for new mortgage lending.
Green rates are the lead product for the three pillar banks who continue to own the lion’s share of the mortgage market.
Competition is heating up
The three pillar banks still control the bulk of the mortgage market, with green mortgages leading the way. However, competition is increasing—and that’s good news for consumers.
- Revolut is widely expected to enter the Irish mortgage market, likely targeting switchers with competitive pricing and a strong digital experience.
- Newer entrants such as Nua Money and MoCo have already brought welcome innovation and faster digital processes.
More competition helps keep rates disciplined and encourages lenders to serve borrower groups that have often been overlooked.
The Big Gap in the Market: Movers
Despite strong demand overall, home movers are struggling.
According to the Banking & Payments Federation Ireland, only 19% of mortgage approvals now go to movers, compared with 60% for first-time buyers. In fact, the number of mover mortgages drawn down last year—around 9,200—is close to a ten-year low.
Instead of moving, many homeowners are choosing to renovate:
- Mortgage top-ups increased 26% year on year
- The average top-up now stands at €135,021
The main obstacle? A lack of bridging finance to trade up.
Most homeowners must sell their existing home before buying a new one, forcing same-day transactions or temporary renting—both extremely difficult in a fast-moving market.
Bridging finance to trade down was introduced in 2024 by ICS, with Bank of Ireland expected to follow. However, similar solutions for trading up are still missing.
Unlocking the mover market will require product innovation. Bridging finance to trade up needs to become a standard option if the second-hand housing market is to recover.
Affordability and Supply of Homes
Latest (BPFI) figures show that average first time buyer and home mover mortgage values have reached their highest levels on record.
However, affordability is becoming more stretched. The average residential property sold in 2025 had a price of €426,000 - eight times the average earnings of €53,000.
Sole buyers are particularly stretched. They accounted for 31% of first time buyer mortgage drawdowns by mid year 2025.
22% of new build home completions were purchased by sole applicant first time buyers. In the 12 months to June these accounted for 64.2% of apartment mortgages.
Measures expected in 2026 to help boost the supply of apartments, including a reduction in VAT on completed apartments, should help increase completions.
It is expected that house prices in 2026 may rise in line with average earnings, at 5%.
While supply is an issue, affordability will remain a concern as demand is robust. The number of properties listed for sale on MyHome.ie at end of September was 13,000, well down from 20,000-plus level prior to Covid-19.
The market is very tight with the low levels of property for sale selling very quickly. The average time to sale agreed is 2.6 months, close to a historic low.
Limited stock for sale is hampering activity, despite robust demand. There were approximately 61,000 property transactions in 2024, down about 3% from 2023, with 2025 expected to show only modest growth on 2024.
The latest MyHome.ie property report forecasts 34,500 new home completions this year. The reality of supply is hitting hard - there are just not enough homes being built and even less are available to families to purchase.
Navigating 2026
The path to home ownership in 2026 will remain challenging. However, being well-informed can make all the difference.
Borrowers who understand lender criteria, rate variations and product options - and who know how to optimise their mortgage when moving, renovating or switching - will be best placed to navigate the year ahead.
Being informed is no longer optional; it is essential.
Contact our team at www.doddl.ie for mortgage advice and support.
