Mortgage rates are rising, but at the time of writing they are higher in Germany than in Ireland, that isn’t the strange bit though.
What’s really strange is that the risk free rate in Ireland is higher than the mortgage rates available. In other words, financially speaking it is safer (if by ‘safe’ you mean accepting a lower return) to lend to a person in Ireland on a house than it is to lend to the Irish government. This is insane and it won’t last.
The response will need to be one of two things.
Banks stop lending Banks raise mortgage rates (or perhaps a little of 1 and a good dash of 2).
Take a look at government bond yields from last week, if a bank has a choice they can lend to the Irish government at 2.8% but they lend to people at closer to 2%. This is typically seen as an impossibility in financial markets so it will only last for a short time because as a rule there is no arbitrage, markets close them down …