The number of owner-occupied mortgages in arrears rose notably at the end of 2022 as households grappled with surging bank interest rates amid rising inflationary pressure.
Figures from the Central Bank of Ireland show the overall number of principal dwelling house (PDH) accounts behind on their payments rose by 997 in the final three months of the year. There was an increase of 2,307 in mortgage accounts that entered short-term arrears of less than 90 days. The increase follows more than a decade of quarterly declines in mortgage arrears.
The growing number of accounts in arrears follows continuous rate hikes from the ECB in recent months. Rising by 3.5% since July 2022, households on tracker mortgages have seen major monthly payment hikes, with some facing upwards of €7,000 in additional fees.
The outstanding balance on PDH mortgage accounts in arrears of more than 90 days was just under €5.8bn at the end of December, equivalent to 6% of the total outstanding balance on all PDH mortgage accounts. Accounts in long-term mortgage arrears accounted for 48% of all accounts in arrears at the end of the fourth quarter.
Of the PDH accounts that are in arrears, some 5,702 accounts are currently part of a legal process, with 35% in the legal system for over five years.
At the end of the quarter, non-banks accounted for 16% of all PDH mortgages outstanding and 77% of all PDH accounts in arrears over one year. A total stock of 60,125 PDH mortgage accounts were categorised as 'restructured' at the end of Q4, representing 8% of total PDH mortgage accounts outstanding.
The number of properties in possession by the reporting institutions at the end of 2022 was 486, down from 545 in the previous quarter.
During the fourth quarter of 2022, a total of 34 PDH properties were taken into possession by lenders, the majority of which were voluntarily surrendered or abandoned, with 15 repossessed on foot of a court order.
Among buy-to-let properties, there were 76,304 residential mortgage accounts with an outstanding balance of €11bn. Some 10,318 BTL accounts were in arrears at the end of December, a decrease of 709 accounts or 6.4%.
Of the total BTL stock, 8,113 accounts or 11% were in arrears of more than 90 days.