Increase in the number of mortgage arrears for the first time

There has been an increase in the number of homeowners who are in arrears on their mortgages as interest rate hikes begin to take hold.

This is the first increase in the number of anticipated arrears in a decade.

The number of late payments rose by nearly 1,000 in the three months to December last year compared with the previous quarter, the central bank said.

Some 46,743 accounts were overdue at the end of last year, the central bank said.

Central Bank statisticians said the rise in the number of defaults on their home loans was due to what it called “anticipated arrears”.

These are people who are just starting to fall behind on their payments.

David Hall of the Irish Organization of Mortgage Holders, which helps people who are behind on payments, said it was the first spike in anticipated arrears in 10 years.

“This is the first time in 10 years that we have seen such an increase in the number of early payment delays.”

He said he has seen a sharp increase in the number of homeowners coming to his organization who are in a situation known as pre-arrears.

This is where they are afraid of being in arrears.

“We see a lot of people coming to see us who are late and running late. They are impacted by the cost of living crisis and the rise in mortgage rates.

Some 38,000 people whose mortgages are held by vulture funds are affected by the European Central Bank’s rate hike. Some are now at rates as high as 9.25 pc.

There have been six ECB hikes, and these folks are variable rate. The funds do not offer fixed rates, and these “mortgage prisoners” cannot change because they have been in arrears in the past.

Non-bank entities, which include vulture fund mortgages as well as those issued by ICS Mortgages and Finance Ireland, hold a large share of delinquent mortgages.

Non-banks held 77% of all residential accounts past due for more than a year, the Central Bank said.

Some 5,702 overdue residential accounts are part of legal proceedings, with just over a third of them in the court system for more than five years.

Central Bank figures show that long-term arrears, i.e. those more than a year behind on their payments, continue to decline.

At the end of December, nearly 30,000 accounts had been overdue for more than three months.

The number of accounts overdue for more than a year was 22,626 in December 2022 compared to 26,769 in December 2021.