One in nine struggling to pay mortgage

NEARLY one in nine residential mortgage holders — 86,271 borrowers — is unable to make repayments or has sought help from their bank.

The news comes as finance groups warned of the impact of future interest rates rises and the National Asset Management Agency (NAMA) said it wants to help potential homeowners who cannot afford the full price of a house.

Figures released by the Central Bank show that, at the end of March, 86,271 borrowers were either more than 90 days behind on their mortgage or had their loan refinanced, up from 79,173 at the end of last year.

In the last week, some of the country’s biggest mortgage lenders underlined the extent of the growing crisis. Irish Life & Permanent said its residential mortgage arrears continue to rise, while Irish Nationwide Building Society confirmed yesterday that 27%, or 1,855, of its home loans are in arrears for more than 90 days.

The Central Bank said 6.3%, or 49,609, of mortgages were in arrears for more than 90 days at the end of March, up from 5.7% at end December. These mortgages totalled €9.6 billion, with €827 million in arrears. At the end of March, there were 782,429 private residential mortgages, valued at almost €116bn. Some 35,341 loans are in arrears for more than six months, up from 31,338 in December.

Managing director of Select Finance Group, Trevor Grant, said the figures were very worrying.

“Both the number and increase in the number of homeowners in arrears is extremely disconcerting, particularly in light of the fact that a number of these homeowners are currently on relatively low interest rates which are only set to rise, or interest-only repayment structures which will have to expire.”

Director of the Irish Mortgage Corporation, Frank Conway, said inflation and interest rate rises are working their way through the mortgage market, which will result in more householders falling into arrears.

Central Bank figures also show a further 140 homes were repossessed in the first three months of the year, up from 106 repossessions at the end of last year.

At a meeting in Cork, NAMA chairman Frank Daly said the agency is looking at providing debt financing to potential home buyers who are afraid of falling into negative equity if they buy a house now.

He said if NAMA had a property and a buyer had partial finance “maybe NAMA can do something with that buyer”.

He said the value of the property that a buyer does not have could be set aside for a few years to “give them a chance”.