Early-stage mortgage arrears rise at end of 2023

Paul Joyce, senior policy analyst at the Free Legal Advice Centres.

The number of households falling into arrears with their mortgage repayments increased at the end of 2023 following the first full year of aggressive interest rate hikes even as accounts in long-term arrears fell, Central Bank figures suggest. 

The figures show that the total number of home mortgage accounts in arrears rose to 47,734 in the last three months of 2023, driven by an increase from the previous quarter in the number of accounts falling into arrears at an early stage. The Central Bank highlighted a decrease in the number of longer-term arrears, of over a year, although it didn't ascribe in its commentary any reason for the decline.  

Following the rapid hikes in interest rates since the summer of 2022, the data for early-stage arrears are closely watched for any signs that Irish households are facing difficulties in meeting their monthly repayment agreements. 

At the end of 2023, vulture funds and credit service agents and other non-bank entities controlled 17% of all home mortgages, but held the lion's share of all accounts in longer-term arrears, the figures show. 

Paul Joyce, senior policy adviser at the Free Legal Advice Centres, or Flac, said the number of people exiting longer-term arrears was eye-catching, but that the rise in early-stage arrears would need watching.     

Mortgage brokers have in the past pointed out that although tracker mortgage holders were instantly hit by mortgage rate increases, many other households will only face higher repayment schedules when their existing fixed-rate mortgages expire this year.