€25.8bn mortgages in arrears of over 90 days

The scale of the mortgage crisis facing the country has been laid bare, with figures showing €25.8bn was more than 90 days in arrears at the end of last year.

Despite promises from the banks to deal with struggling households, the Central Bank report found just a quarter of owner-occupiers in arrears of three months or more have had their mortgages restructured. Only one in five buy-to-let accounts in arrears are classified as restructured

It also noted that the vast majority of borrowers given reduced payments were only put on these arrangements on a short-term basis.

Some 11.9% of residential mortgages were in arrears by more than 90 days at the end of last year, while 18.9% of buy-to-let mortgages were in arrears more than 90 days. And while the pace of early arrears mortgages has slowed, the number of longer term arrears cases has increased significantly.

Some 6.5% of residential mortgages are in arrears by more than 360 days and just under half of these are in arrears by more than 720 days. There are 11% of all buy-to-let mortgages in arrears by over 320 days.

The Central Bank expects 15,000 people to avail of non-judicial settlement arrangements under the new Personal Insolvency legislation. A further 3,000 are expected to apply for bankruptcy over the next year in the first phase of resolving the massive mortgage arrears crisis.

Permanent TSB chief executive Jeremy Masding said at yesterday’s AGM that his bank will write of certain levels of unsustainable debt for mortgage holders.