Negative equity falls to 6% per borrower

The benefits of rising house prices in Ireland and lower mortgage arrears will continue to spread to Irish banks and bonds backed by home loans, while the average amount of negative equity per borrower has fallen significantly, according to a report released today.

Moody’s Investors Service found that the favourable economic environment in Ireland and the related recovery in house prices have improved Irish banks’ asset quality, while negative equity per borrower has fallen to 6% from 17% in 2013.

However the level of non-performing mortgages remains high, and loans still in long-term arrears make up the majority of the total, posing tail risks for Irish banks.