Mortgage drawdowns for first-time buyers hit highest level since 2007

Average first-time mortgage on new properties increased by 1.6% year-on-year to almost €322,000, the BPFI found

BPFI said more than 43,000 mortgages were drawn down in 2024, valued at almost €12.6bn, with more than 51,300 mortgages being approved in the period

Mortgage drawdowns for first-time buyers hit their highest level since the financial crash almost 18 years ago, new figures from the Banking and Payment Federation Ireland (BPFI) show, with more than 26,000 mortgages being drawn down.

Drawdowns from first-time buyer mortgages totalled €7.8bn in value, the BPFI added, with this segment remaining the largest by both volume and by value.

The average first-time mortgage on new properties increased by 1.6% year-on-year to €321,912, the BPFI said, while the average first-time buyer mortgage on secondhand properties rose by 7.4% to €283,969.

However, it also noted that re-mortgage and switching volumes rose by 36% in the year, with their value rising by 45% in the same period.

In the final three months of 2024, more than 13,000 new mortgages to the value of €3.9bn were drawn down by borrowers, reflecting an increase of over 12% in volume and 20% in value on the corresponding period of 2023.

Overall, the BPFI said more than 43,000 mortgages were drawn down in 2024, valued at almost €12.6bn, with more than 51,300 mortgages being approved in the period, valued at more than €15.3bn. Approval volumes rose by almost 3% annually while values rose by 8.2%.

The report also noted that the value of mortgage approvals and drawdowns increased in 2024, rising by 4%, although drawdown volumes fell marginally, dropping by 1.3% year-on-year.

Approvals 

In addition to its mortgage drawdown report for the final three months of 2024, the BPFI also published its mortgage approvals report for December, which found that almost 3,600 mortgages were approved in the final month of 2024, 60% of which were for first-time buyers. 

The number of mortgages approved in December fell by more than 18% month-on-month, although rose by 28.6% year-on-year.

Mortgages approved in December 2024 were valued at €1.1bn, of which first-time buyers accounted for €673m and €270m by mover purchasers.

Speaking on the figures, Brian Hayes, chief executive of BPFI said: “Our latest mortgage data, shows another strong year for first-time buyers who have dominated the mortgage market in recent years. 

"While activity in the overall market was more subdued, solid growth in approvals activity points to a positive outlook for 2025 and beyond.”

The CEO added that it was "particularly encouraging" to see strong growth in first-time buyer mortgages on new property purchases or self-builds which reached their highest annual volume and value since 2008 and 2007, respectively.

'Highest levels on record'

"Demand for housing and mortgages remains very strong, as evidenced by the continued rise in average mortgage drawdown values. Average mortgage values reached their highest levels on record in all four home mortgage segments in 2024."

Looking ahead for 2025, Mr Hayes said he expects strong housing and mortgage demand to continue, adding: "The potential mortgage output for 2025 looks encouraging, evident from the solid growth in mortgage approvals activity. 

"However, while we have seen housing output increase significantly in recent years, it will be crucial for both new and secondhand housing supply to increase to meet this demand."

Commenting on the reports, Trevor Grant, chairperson of Irish Mortgage Advisors noted: "First-time buyer mortgage drawdowns reaching record highs is a clear indicator of the strong demand for home ownership, driven by a resilient economy and uncertainty in the rental market. 

"While this is encouraging, we need to see significantly more new homes delivered to curb house price inflation and meet growing demand."