Irish laon rates are no longer some of the steepest in the eurozone, new figures show.

Ireland had either the highest or second-highest interest rates of the past year but they are now closer to the eurozone average.

However, it is not that Irish rates are falling but other countries’ loan rates are rising faster in the face of the European Central Bank increasing its base rate to battle spiralling inflation which is at near 40-year highs.

The average rate in Ireland was 2.64% on new mortgages in August, which is up just 0.01%, from 2.63% in July, but down 0.1% from 2.74% in August last year, according to Central Bank figures released yesterday.

Irish banks were not under as much pressure to pass on two European Central Bank increases, as they have savers’ deposits of €7.2billion to draw on.

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However, David Hall, head of the Irish Mortgage Holders Organisation, said: "They are using all those deposits and delaying interest rates increases, so it’s an optical illusion. These figures should have a massive caveat, two interest rate rises not added on and a third due."