The end of the previous year saw a modest rise in the amount of mortgages in arrears, caused largely by an escalation in loans falling behind from nonbank lenders in short duration arrears. By December 2023, a total of 707,045 mortgage accounts for principal dwelling houses (PDH) existed within the State, totalling over €100 billion in value.
Newly released data from the Central Bank reveals that out of these PDH mortgages, 47,734 found themselves in arrears as of December 2023, indicating an increase of 409 accounts, or a rise of 0.86 per cent, when compared with the last quarter.
The main contributor to this overall increase was a surge in the number of PDH mortgage accounts entering into arrears on earlier terms, less than one year’s duration. Accounts in arrears for less than 90 days witnessed a growth of 673 between the third and final quarter of 2023, primarily owned by nonbank institutions, totalling 18,700.
By the conclusion of December, the number of PDH accounts in arrears exceeding 90 days, but still under a year, stood at 8,766, an elevation of 393 compared to the previous quarter.
Simultaneously, the number of accounts falling under long-term arrears (beyond one year) were 20,268 at the conclusion of 2023, indicating a drop of 657 accounts from the third quarter.
Rachel McGovern, Brokers Ireland’s director of financial services, revealed that a 3 per cent increase in early arrears in the final quarter of 2023 adds to a rise of 3 per cent experienced in the earlier quarter. She indicated this as a glaring sign of the financial strain prompted by the ten interest rate increases by the ECB since July 2022, and subsequent rises implemented by Irish lenders, a few of whom have not fully applied these subsequent increases, adding the likelihood that we might only be witnessing the beginning of the effects of interest rate hikes.
She urged all borrowers having difficulty with making their repayments to engage with their lenders prior to falling into arrears, for instance through a mortgage broker, pointing out that the result is likely to be more beneficial than after falling into arrears.
In June 2013, the state saw the peak number of home mortgage arrears, reaching 97,874 PDH accounts over 90 days overdue. However, since then, the figures have been in a continuous decline.
In 2023, PDH mortgage accounts over 90 days in arrears noted a 3 per cent drop annually, spurred by an 11 per cent decrease in accounts with extended delays. The total balance for these overdue PDH mortgage accounts surpassed €5.8 billion by the conclusion of 2023.
Legal proceedings are currently underway for roughly 11 per cent (5,117 accounts) of the arrears on PDH accounts.
In the concluding three months of 2023, lenders took control of 28 PDH properties and got rid of 57. As a result, lenders possessed 202 PDH properties as 2023 came to an end.