11,000 fewer mortgages in arrears

Almost 70% of mortgage holders behind on their repayments were more than 90 days in arrears at the end of August despite recent improvements, Central Bank figures reveal.

The bank’s monthly report shows 11,000 fewer mortgage holders were in arrears at the end of August compared to six months previously. Still, 69,865 of the 100,100 primary dwelling mortgages were in arrears of 90 days or more.

On a monthly basis, 2,000 fewer mortgages were in arrears at the end of August than July, down from 102,221.

A similar percentage fall of mortgages in arrears of 90 days or more was also seen, falling from 71,300 to 69,865.

Despite the number of permanently restructured mortgages rising in August, 50,000 of those in arrears for more than 90 days have not been restructured.

Overall, 20,276 mortgages were restructured by the end of August, with three quarters having been permanently restructured and just over 5,000 restructured temporarily.

Mortgage restructuring can take a number of different forms, including lengthening the term of the loan; delaying payment on part of the mortgage through a split mortgage agreement; and arrears capitalisation, which adds some or all of the outstanding arrears to the remaining principal balance to repaid over its lifetime.

Of the permanently restructured loans, the arrears capitalisation option accounts for almost 30% of restructuring, making it the most frequently used, while split mortgages make up a further fifth of restructures.

Just over 15,000 borrowers with primary dwelling mortgages opted to extend the term of the loan, thus cutting the monthly repayments that must be made.

Interest-only arrangements account for more than 50% of temporarily restructured mortgages.

In the buy-to-let sector, 380 fewer mortgages were in arrears to end August compared with the same period a month previously.

Those in arrears for 90 days or more accounted for 26,500 of 32,800 buy-to-let mortgages in arrears.

A little under 6,500 loans in this sector in arrears for 90 days or more were restructured, with 75% remaining as they were.

Earlier this week, the Central Bank set out proposals to restrict mortgage lending in attempt to reduce risk in the sector.