Mortgage switching at highest level in at least a decade

Mortgage approval activity increased in volume terms by 14.3% year on year and increased in value terms by 25.3% over the same period

Mortgage switching volumes and values more than doubled in year-on-year terms, reaching their highest level in at least a decade, according to data from the Banking & Payments Federation Ireland (BPFI).

The latest figures from BPFI’s Mortgage Approvals Report for May show there were 5,355 mortgage approvals, valued at €1.5 billion.

Mortgage approval activity increased in volume terms by 14.3 per cent year on year and in value terms by 25.3 per cent over the same period.

Mortgage approval volumes for property purchase increased by 0.7 per cent year on year to 3,841, valued at €1.1 billion.

First-time buyer (FTB) mortgage approval volumes increased by 2.3 per cent year on year to 2,640 while mover purchase approval volumes decreased by 2.7 per cent year on year to 1,082.

Remortgage/switching approval volumes rose by 111.5 per cent year on year to 1,237 while the number of top-up approvals fell by 2.5 per cent year on year to 277.

Remortgage/switching approval values rose by 129.3 per cent year on year to €329 million while the value of top-up approvals fell by 12 per cent year on year to €27 million.

BPFI chief executive Brian Hayes said it was “clear that switching activity has grown sharply in recent months”.

“During the month of May switching volumes and values more than doubled in year-on-year terms with switching levels at their highest ever recorded since BPFI began collecting this data in 2011,” he said.

“FTBs still accounted for about half of mortgage approvals both in volume and value terms, these latest June figures are notably dominated by mortgage-switching activity and May was one of the strongest performances recorded for FTB approvals.

“This is particularly true for approval values, with a significant increase in average loan values year on year driving strong growth in lending values.

“This is likely driven by higher housing prices. In fact, May 2022 saw the second highest recorded value for FTB approvals [after October 2020] and the seventh highest for mover purchase.”

Residential investment letting (RIL) mortgage approval volumes decreased by 2.5 per cent year-on-year to 119. RIL mortgage approval values increased by 7.8 per cent year-on-year to €20 million.

The value of FTB mortgage approvals increased by 14 per cent year-on-year to €732 million, while the value of mover purchase approvals increased by 6.3 per cent year-on-year to €346 million.

There were 54,710 mortgage approvals in the 12 months ending May 2022, valued at €14.2 billion.

Annualised mortgage approval activity to the end of May increased in volume terms by 1.24 per cent compared with the year to the end of April and increased in value terms by 2.11 per cent over the same period.

Annualised purchase mortgage approval volumes rose by 0.06 per cent compared with the prior period to 43,066 in the 12 months ending May, while the annualised value of purchase mortgage approvals was €11.6 billion, up by 0.97 per cent.

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter