Brendan Burgess
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Long-Term Mortgage Arrears in Ireland, by Terry O’Malley, examines the characteristics of Irish residential mortgages in long-term arrears, meaning those mortgages that have accumulated at least two years’ worth of missed monthly payments. The mortgages examined in the research were taken out on the primary home of the borrower with one of the five main banks in Ireland. The loan sample dates from July 2015 to December 2017.
The key findings of the Financial Stability Note are:
Note: The ratio of unique borrowers to mortgage accounts in this research by Terry O’Malley is roughly 80%, because a borrower may have multiple loans. As such, for every five loans in the data, there are four associated households.
The key findings of the Financial Stability Note are:
- While the number of mortgages in long-term arrears continues to fall, the pace of reduction each quarter has begun to slow. For the first time, as many loans are exiting the portfolio of the main banks as are curing to lower arrears states.
- As at December 2017, the average amount of missed payments on these mortgages is €66,409. 10% of the loans have accumulated over €129,148 worth of missed payments and half have arrears of more than €52,544. The average loan has arrears outstanding of around 23% of what the property is estimated to be worth.
- Long-term arrears cases tend to have received a smaller number of modifications and are less likely to be currently modified. Loans that go through the Mortgage Arrears Resolution Process are twice as likely to end up in a lower arrears state six months later, compared to exit. This demonstrates the importance of borrower engagement with the arrears resolution process.
Note: The ratio of unique borrowers to mortgage accounts in this research by Terry O’Malley is roughly 80%, because a borrower may have multiple loans. As such, for every five loans in the data, there are four associated households.
