One major impact of the booming housing market is the soaring size of mortgages for many borrowers, particularly young people. The average size of a mortgage is still, perhaps, surpassingly low but that is being kept down by third and fourth-time buyers and those who have had mortgages for many years. According to the latest Department of the Environment figures, the average size of a mortgage at the end of September last was £74,000. That was up from £60,000 the previous year. These are official figures, to which all 14 lenders are obliged to contribute.
But probably the biggest change is the number of so-called "large mortgages" which are being offered.
Most lenders would classify a large mortgage as being between £150,000 and £250,000.
There has been a significant increase in these loans from all the main lenders. However, particularly for those in the top end of that range, the banks tend to predominate.
Many borrowers in this category may not have simply a straightforward PAYE job which they are using to fund the repayments. And the additional financial complications usually means they are more likely to go the bank which already knows their business than to approach a new lender or an institution which merely holds some of their saving plans.
Of course, there are loans for more than £250,000, but these tend to be few and far between as most people buying homes in that range tend to have large amounts of investments, or other properties, which they use rather than borrowing the additional cash.
Just three years ago, these large loans would have made up only about 5 per cent of the total amount of new loans from one of the banks. However, that has now risen to between 20 per cent and 30 per cent for some of the larger banks.
The typical borrower in this category is a graduate in their early 30s. Most have been working for around 10 years. Generally, these borrow around £180,000 to £220,000 as few have significant amounts of equity built up in either first homes or apartments, or from inheritances.
Borrowers looking for £150,000 to £180,000 tend for the first time ever to be ordinary workers who in the past would never have considered getting into debt for more than £100,000. But the ever increasing cost of first homes is forcing many into more debt than ever before.
Lenders also point out that more than 53,000 people have returned to this country over the past three years and most of these tend to be aged between 25 to 40. Many have earned large salaries abroad and often have owned property which they have cashed in.
Many work in the new, well-paid sectors of the economy, particularly computer software companies and other high technology companies.
However, even larger loans are still comparably rare. Lenders say that a loan of £500,000 or £750,000 still causes a good deal of excitement. People who are taking out loans of this size tend to be buying the more high profile homes in Dublin's suburbs. Few would be PAYE workers but rather would be using considerable other assets to guarantee the size of the loan.
One lender said these borrowers always have access to a large number of different investments. They usually hold large numbers of shares and have built up a good deal of equity in other properties. Rather than selling the shares or a property, they use the equity to raise the larger loan.
Most are professional people with barristers of course counting among their numbers. Others are solicitors and accountants.
