A quarter of Irish residential mortgages have been taken out to finance rental properties, and more than half are on tracker rates, Central Bank data showed today.
The figures were in a new quarterly report on the commercial and consumer lending markets in Ireland, part of a bid by the Central Bank to improve information on the state of the economy.
Irish banks had €24.6 billion of outstanding buy-to-let mortgages on their books at the end of March, a quarter of all house purchase loans, the report said. Buy-to-let loans are widely seen as having a higher risk of default.
Tracker mortgages, which track interest rates set by the European Central Bank (ECB), accounted for 53.4 per cent of outstanding house loans, the report said.
Such loans have caused significant losses at Irish lenders as they tie borrowers to record-low ECB rates at a time when they are unable to obtain cheap funding.
The total amount of loans to private households at the end of March was €155 billion. The volume of mortgages issued fell 2.6 per cent in the first quarter, the fifth quarterly decline in a row.
