Banks lent extra €795m for family homes in third quarter of 2019

Lending driven by fixed-rate mortgages as variable-rate lending continued to decline

The banks lent an additional €795 million for the purchase of family homes during the third quarter of last year, the latest figures from the Central Bank show.

This lending was driven by fixed-rate mortgages, with fix periods of over three and up to five years the most popular among borrowers. Variable rate mortgage lending continued to decline.

Net lending to Irish households increased by €176 million in November 2019 and recorded a growth rate of 2.1 per cent over the year to November 2019. This was an increase of 1 per cent when compared with the previous 12-month period.

New loans for house purchase exceeded repayments by €186 million in November. In annual terms, loans for house purchase increased by 1.8 per cent.


Variable-rate mortgages for family homes declined by €1.2 billion in the quarter. This was driven by a reduction in standard variable loans of €953 million. There was an increase of €92 million in loans fixed up to one year.

Fixed-rate mortgages for family homes increased by €2 billion in the quarter, which was the largest quarterly increase in fixed-rate mortgages since the series began.

An increase in demand for loans fixed for over three and up to five years accounted for €1.2 billion of the total increase. In annual terms, mortgages fixed for over three and up to five years have grown by 67.7 per cent.

Consumer lending decreased by €5 million in November. However, in annual terms, growth in consumer lending remained strong at 4.8 per cent by end-November.

Deposits from households decreased by €70 million in November. This was the first time since July 2018 that withdrawals exceeded lodgements. However, in annual terms, lodgements continued to exceed withdrawals by €6.8 billion.

Overnight deposits increased by €140 million in November. That was a sharp decline in the increase of overnight deposits when compared with the previous month.

This slowdown was the primary factor contributing to the overall decline in household deposits this month as the trend of decreasing term deposits continued.

Fixed-term mortgages

Joey Sheahan, head of credit at said 2020 “could be the year of the fixed-rate mortgage in Ireland”.

“These figures give weight to our own observation that more and more mortgage holders are recognising the value of fixed rates,” he said.

“They give certainty of repayments for the fixed-rate term, and often offer borrowers peace of mind when it comes to mortgage affordability and budgeting.

“It is anticipated that this year we’ll see even further competition from lenders on fixed rates – which will, in turn, mean that an even greater number of mortgage holders and mortgage seekers will go for this option.”

Meanwhile, net lending to non-financial corporations (NFCs) decreased by €3 million in November.

That was driven by a reduction in loans over five years,which decreased by €48 million. This reduction was offset primarily by an increase of €44 million in loans up to one year.

NFC deposits decreased by €974 million in November, continuing a trend of seasonal decreases which began in November 2017. In annual terms, NFC deposits have grown by 14.5 per cent.

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter