Fixed rate mortgages soar at Bank of Ireland
Bank of Ireland's head of retail Liam McLoughlin has told the Oireachtas Finance committee its fixed rate mortgage product accounts for 88pc of new lending volumes, underscoring the lenders efforts over the past two years to persuade consumers to steer clear of the standard variable rate.
Mr McLoughlin is fronting the committee in place of outgoing chief executive, Richie Boucher, who is due to leave the bank next month. He will be succeeded by ex HSBC banker, Francesca McDonagh.
In his opening presentation Mr McLoughlin said the bank recognises the "fundamental importance of the family home" and said " 9 out of 10 owner occupier customers are fully up to date on their mortgage". He said 9 out of 10 of these borrowers "are meeting the terms of their forbearance arrangement" and claimed the same number were offered forbearance solutions after demonstrating "they were in financial difficulty".
He also underscored the shift to fix rate mortgages emphasising that these loans have grown significantly in the last two years.
In 2016 fixed rate mortgages accounted for 75pc of new lending and 30pc in 2015. This shift has been part of the banks strategy to dominate the fixed rate mortgage market.
Mr McLoughlin, who was joined by Stephen Mason, Head of Group Customer Operations at Bank of Ireland, and Pat Farrell, Head of Group Communications and Government Relations said the group ranks as "largest lender to the Irish economy, lending €3.4bn" in the first six months of the year.
He said signficant progress has been made on reducing mortgage arrears with the number of owner occupiers falling behind on payments reducing by 60pc from peak levels in May 2013. He said that Bank of Ireland "mortgages greater than 720 days in arrears have also continued to reduce, falling to 1.4opc in Q2 2017 compared to the rest of industry average of 5.2pc.