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Friday 17 November 2017

Buyers take on bigger mortgages as surge in house prices continues

First-time buyers are taking out even larger loans than a year ago Stock photo: PA
First-time buyers are taking out even larger loans than a year ago Stock photo: PA
Charlie Weston

Charlie Weston

Surging property prices are forcing buyers to borrow more.

New figures show a rise in the level of mortgage borrowing and the amount that property purchasers are drawing down in home loans.

The average amount borrowed by those taking out a mortgage has shot up by €20,500 in the past year, according to new figures from the Banking and Payments Federation.

Average loans being drawn down are now €212,000.

But first-time buyers are taking out even larger loans than a year ago.

They are now being pushed into borrowing €24,000 more than last year, with the average new-buyer loan size now €207,000.

Revelations that buyers are being forced to take on larger mortgages come as separate figures this week showed property prices rose almost 13pc in the year to September.

The latest surge in prices has occurred while growth in wages is muted.

The fastest growth in lending continues to be seen in the first-time buyer segment.

Close to 10,000 new mortgages, across all categories, were drawn down in the July to August period, up 1,500 on the same period last year.

Almost half of the mortgages issued were for first-time buyers.

Irish Independent

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