Mortgage arrears may follow 20,000 into retirement

More than 20,000 Irish mortgage holders are facing the prospect of carrying non-performing mortgage debt into retirement, figures from the Central Bank of Ireland show.

A total of 22,264 mortgage accounts held by people over 50 are in arrears, with almost half – 9,370 – aged 60 or above. A majority of the accounts are in deep arrears, with borrowers more than 720 days behind on their payments.

The Central Bank data, in addition, shows that 21,276 mortgage holders aged 60 or above still owe more than €150,000 in mortgage debt.

While not all these accounts will be in arrears, concerns have been raised about the sustainability of these debts for people finishing their working lives and entering into retirement without paying down their mortgage entirely.

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The data also shows that some 15,000 people aged 50 and over are on interest-only mortgages.

A spokeswoman for Age Action Ireland said the publication of the data “gives a clearer picture of the worrying situation for Ireland’s ageing population”.

State pension

“While there has been an assumption that older people close to, and in receipt of, the State pension are generally mortgage-free homeowners, it is clear that this is no longer true,” she said.

The absolute number of older people in mortgage arrears is likely to be higher, as the data only covers the State’s five largest lenders, and does not include mortgages owned by investment funds which have bought billions of euro of Irish debt in recent years.

Age-based statistics on mortgage arrears are not usually compiled by the Central Bank, which provided the analysis in response to a question asked by Labour Party finance spokeswoman Joan Burton. She said banks should approach the situation with a sense of respect for older people.

Just transition

"The Government is talking very widely about a just transition for workers in Bórd na Mona and the ESB, and it's time they apply this principle of a just transition to older people," she said.

The figures show that the overall level of mortgage arrears – 6.8 per cent – is slightly lower among those over 50 who still have debt outstanding than in the general population, where some 8.5 per cent of mortgages are in arrears.

However, it is clear from the data that thousands of people are in serious difficulty already. There are almost 7,500 people aged 60 and above who are in serious long-term arrears of 360 days or more.

Age Action called on the Government to address the issue of income inadequacy among older cohorts, many of whom it says will face severe challenges with the cost of living, including any remaining mortgage debts, as they age.