Sharp rise in switching activity leads to mortgage approval growth, new report shows

Analysis from the Central Bank showed that the value of mortgages renegotiated on fixed-rate terms more than trebled between Q3 last year the same period this year to €1.7bn.

A sharp rise in switching activity has led to growth in mortgage approvals, a new report showed.

The increase in switching follows decisions by the remaining retail banks in the Republic to raise rates for fixed mortgages after the ECB increased interest rates three times this year, with further hikes planned.

“It is clear that customers are actively managing their mortgages by seeking out new deals to minimise the impact of ECB interest rate decisions,” said Brian Hayes, chief executive of the Banking and Payments Federation Ireland (BPFI).

A total of 5,349 mortgages were approved in October, reaching a value of €1.5bn for the month, according to the BPFI’s latest Mortgage Approvals Report.

The value of mortgage approvals rose by 23% year-on-year, the report found.

Separate analysis from the Central Bank showed that the value of mortgages renegotiated on fixed-rate terms more than trebled between Q3 last year the same period this year to €1.7bn.

There was no change in the number of mortgages approved month-on-month, but volumes rose by 17% compared with the same period last year.

First-time-buyers (FTBs) were approved for 2,363 of these mortgages while mover purchasers accounted for 1,001.

However, the rising value of these mortgages reflects "the sharp increase in housing prices since 2021”, said Mr Hayes.