Mortgage arrears continue to decline as economy picks up

Almost 55,000 still at least three months behind in repayments at end of December

The number of owner-occupier mortgages at least three months in arrears fell 3.7 per cent during the final three months of 2016, marking the 13th consecutive quarterly decline, as the economy continued to improve and banks restructured their soured loans.

Some 54,269 home loans, or 7.4 per cent of a total of 736,894 Irish mortgages, valued at €100 billion, remained at least 90 days behind in repayments at the end of December, the Central Bank said on Thursday. The rate fell from 7.6 per cent from the previous quarter.

Almost 121,000 loans on private dwelling houses were classified as restructured at the end of December, of which 87 per cent were meeting the terms of the new arrangement with lenders.

Arrears capitalisation, where arrears are added to the principal of the loan, was the most common form of restructure, comprising almost 22 per cent of the total, followed by “split mortgages” at 22.4 per cent, where part of a loan is warehoused for an agreed period.


Meanwhile, the percentage of buy-to-let loans at least three months in arrears fell to 15.7 per cent in December from 16.2 per cent in September.

At the end of December there were 736,894 residential mortgage accounts held in the Republic to a value of €99.6 billion. Of these, 77,493 were in arrears, down 2.6 per cent versus the third quarter of 2016.

Fourth quarter

Although the number of accounts in arrears for at least 90 days fell for the 13th consecutive quarter, accounts in arrears for up to 90 days rose during the fourth quarter, the first increase since the end of September 2012.

The number of accounts in arrears for over 360 days fell to 42,031 at the end of 2016, equivalent to 6 per cent of the total stock.

The latest data also shows a 3.2 per cent decline in the number of accounts in arrears for at least 720 days. Such accounts constitute 43 per cent of all accounts in arrears.

A total of 8,475 new restructuring arrangements were agreed between lenders and borrowers during the fourth quarter, with 87 per cent of all restructured accounts deemed to be meeting the terms of their agreement.

During the final quarter of 2016, legal proceedings were issued in 1,397 cases. In 273 cases, courts were granted an order for repossession or sale of the property.

Overall, there were 1,704 properties in the banks’ possession at the beginning of the fourth quarter.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist