independent

Wednesday 16 April 2014

Subprime mortgage holders three times more likely to be in arrears

THERE has been a surge in the number of potential property buyers approved for a mortgage in February.

PEOPLE who took out a mortgage with a subprime lender are three times more likely to be in arrears than those who borrowed from mainstream banks.

New figures show that arrears for mortgage customers of subprime lenders are three times higher than the industry average.

More than half of the homeloans issued by sub-prime lenders are behind on repayments by three months or more.

Subprime lenders like Start and GE Money offered mortgages to people who could not get them from the main banks during the boom. They were turned down by banks because they had a poor credit rating or an irregular income.

Some 17pc of the value of mortgage accounts across all the lenders and banks are in arrears, but for subprime lenders more than half of the value of mortgages issued have arrears on the accounts, Finance Minister Michael Noonan told Fianna Fail’s Michael McGrath in a Dail reply.

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