Monday 24 April 2017

5,000 more go into arrears on mortgages

Ratings agency Moody's has calculated that, by December, more than 45,000 mortgage holders had failed to pay their home loan for three months or more. Photo: Thinkstock
Ratings agency Moody's has calculated that, by December, more than 45,000 mortgage holders had failed to pay their home loan for three months or more. Photo: Thinkstock

Charlie Weston Personal Finance Editor

ANOTHER 5,000 mortgage holders have gone into arrears, new figures reveal.

More than 45,000 homeowners have now failed to pay their mortgage for three months or more. Property experts said the arrears figures were now accelerating at an alarming rate.

However, other mortgage experts pointed out that the overall arrears level was low, with around one-in-17 mortgage holders behind on their repayments.

Ratings agency Moody's has calculated that, by December, more than 45,000 mortgage holders had failed to pay their home loan for three months or more.

This means up to 80,000 people are struggling to repay their mortgage as, along with those in arrears, another 30,000 to 40,000 people have had to do a deal with their lender to reduce their monthly repayments.

The most recent figures from the Central Bank show around 40,000 homeowners were in arrears by last September. New figures are due out next week.

Yesterday's figures from Moody's also show that more than 13,000 people have failed to make any payment for a year or more.

Director of Irish Mortgage Corporation Frank Conway said: "What is even more concerning is the fact that these latest figures do not factor in the current bout of interest-rate increases being announced by various mortgage lenders (for their standard variable rate customers)."

He added that it was also a concern that the European Central Bank (ECB) was widely expected to increase its base rate from the end of the summer, which would make mortgage payments more difficult.

This would mean arrears could start soaring later in the year.

Operations director of Irish Mortgage Brokers Karl Deeter said Moody's figures showed that the mortgage problem was greater than the Central Bank was admitting.

Pushed up

He said the fact an additional 5,000 mortgages were in arrears would impact on a total of 15,000 people, as there is an average of three people per household.

Three lenders have already pushed up their variable mortgage rates this year, with two lenders effectively closing off the option for homeowners of choosing a fixed-rate mortgage.

Economist Ronan Lyons of the Daft.ie website said everyone in arrears was a case of a family in misery, but he stressed that more than 90pc were continuing to repay mortgages.

There are around 790,000 mortgages in Ireland, and 5.74pc of them are in arrears, according to Moody's.

A spokesman for the Irish Banking Federation said it expects arrears figures to rise this year, but stressed it does not expect a rise in repossessions.

Irish Independent

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