Number of Irish mortgages in arrears increases slightly in final quarter of 2023

There was a slight uptick in the number of mortgages in arrears by the end of last year, driven by an increase in the number of loans from nonbank lenders in short-term arrears.

By the end of December 2023, there were a total of 707,045 mortgage accounts held for principal dwelling houses (PDH) in the State, valued at more than €100 billion.

Latest figures from the Central Bank show that some 47,734 of these PDH mortgages were in arrears by December 2023, an increase of 409 accounts, or 0.86 per cent, compared to the previous quarter.

The overall increase was driven by a rise in the number of PDH mortgage accounts entering earlier term arrears of less than one year.

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The number of mortgages in arrears for less than 90 days increased by 673 accounts between the third and final quarter of 2023, mostly held by nonbank entities, to a total of 18,700.

The number of PDH accounts in arrears of more than 90 days but less than one year was 8,766 by the end of December, an increase of 393 compared to the previous quarter.

Meanwhile, the number of accounts in long-term arrears (more than one year) stood at 20,268 at the end of 2023, a decrease of 657 accounts from the third quarter.

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Rachel McGovern, director of financial services at Brokers Ireland, said the 3 per cent rise in early arrears in the final quarter of 2023 comes on top of a 3 per cent rise in the previous quarter.

“[It] is a clear indication of the financial stress being caused by the 10 ECB interest rates hikes we’ve seen since July 2022 and the follow-on increases by Irish lenders, some of whom have not applied full follow-on increases,” she said, adding that perhaps we were only beginning to see the impact of interest rate hikes.

She encouraged all borrowers struggling to make repayments to make contact with lenders before arrears happen, such as through a mortgage broker, “since the outcome is likely to be better than [it would be] afterwards”.

The number of home mortgages in arrears in the State peaked in June 2013, with 97,874 PDH accounts in arrears for more than 90 days, and it has steadily decreased since then.

In annual terms, the number of PDH mortgages in arrears for more than 90 days fell by 3 per cent in 2023, driven by an 11 per cent decline in the number of accounts in long-term arrears. The outstanding balance on PDH mortgage accounts in arrears of more than 90 days was more than €5.8 billion by the end of 2023.

Of the PDH accounts in arrears, some 5,117 accounts (or 11 per cent) are currently part of a legal process.

In the final quarter of 2023, 28 PDH properties were taken into possession by lenders, while 57 were disposed of. As a result, lenders were in possession of 202 PDH properties by the end of last year.

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