Mortgage arrears total declines despite high jobless rate

Central Bank data show number of home loans in arrears fell by 2,838 in first quarter

The number of home loans classified as being in arrears has fallen despite the economic upheaval associated with Covid-19.

Figures published by the Central Bank show that the number of owner-occupier mortgage accounts in arrears fell by 2,838 in the first quarter of 2021. This was primarily driven by a decline in shorter-term arrears – those in arrears for fewer than 90 days – which fell by 1,776.

Longer-term arrears – those behind in their repayments by a year or more – also declined, falling by 619 accounts.

Many predicted the pandemic and the associated rise in unemployment would trigger a spike in arrears. However, temporary payment breaks agreed between borrowers and lenders, and Government financial supports have helped keep the level of arrears in check.


Some 89,000 mortgage holders availed of payment breaks in the initial phase of the pandemic last year.

The Central Bank data suggests 5.2 per cent of all owner-occupier mortgage accounts were in arrears of 90 days or more at the end of March, representing 37,723 mortgage accounts..


Of these 17 per cent (or 8,632 accounts) were overdue by between two and five years, 20 per cent (or 10,451 accounts) were in arrears by between five and 10 years, while 10 per cent (or 5,416) were in arrears greater than 10 years.

Of the owner-occupier accounts in arrears, 7,260 accounts (or 14 per cent) are currently part of a legal process.

The courts granted an order for repossession or sale of the property affecting 42 accounts, while a total of 21 private dwelling homes were taken into possession by lenders during the quarter, down from 29 properties in the previous quarter.

The figures show there were 96,414 residential mortgage accounts for Irish buy-to-let (BTL) properties, with an outstanding balance of €15 billion. Some 14,532 of these were in arrears, a decrease of 606 accounts or 4 per cent over the quarter.

Umbrella group Brokers Ireland described the decline in short-term arrears as a positive development but queried why the level of long-term arrears remains substantial.

“Even within what are termed restructured loans, a large cohort, 26.7 per cent involve arrears capitalisation whereby outstanding arrears are added to the remaining balance,” the group’s director of financial services Rachel McGovern said.

“It’s likely that quite a proportion of these will not resolve successfully. It’s a delaying of the inevitable effectively, and already almost one in every five (19.3 per cent) are not meeting the terms of the restructure,” she said.

She said the prolonging of dealing with such arrears is contributing to the higher rates of interest other mortgage holders are paying.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times