The number of principal dwelling house accounts in arrears over 90 days was 24,583 at the end of June. At 3.5pc, this is the lowest proportion since the financial crash. Three-quarters of these are held by non-banks.
In annual terms, the number of principal dwelling house accounts in arrears over 90 days fell by 13pc. The number of mortgages in long-term arrears, of over a year, has also fallen. Now standing at 18,044, this represents 2.6pc of principal dwelling house accounts, which is down by 2,021, or 10pc, year on year.
The Central Bank data shows that there are currently 698,335 private residential mortgage accounts for principal dwellings, with a value of €106bn. Of these, 37,750 are in arrears, a decrease of 2,587 on the previous quarter, with the main fall being in cases of long-term arrears.
Between April and June this year, just 27 principal dwelling houses were repossessed by lenders, while another 24 were sold. Lenders were in possession of 116 properties at the end of the second quarter.
Meanwhile the median interest rate on bank-held mortgages at the end of June was 3.45pc, down by 0.5pc from the same time last year.
The median interest rate on mortgages held by lending non-banks was 3.45pc, but that was up from 2.85pc in June 2024.
The gap between the median rates held by non-lending non-banks versus banks fell to 10 basis points in June, and is now the smallest gap since records began in June 2023.
Lending non-banks originate their own mortgage lending, while non-lending non-banks do not. They are usually funds that bought up books of distressed mortgages after the financial crash, ones that may have been through a period of arrears and are represent a bigger risk to the lender.
Donal Magee, senior underwriter with Núa Money, said the recent fall in median mortgage interest rate for non-bank lenders is a positive development for consumers, as these institutions have established a strong presence in the Irish market.
“While the median mortgage interest rate of non-bank lenders is higher than on bank-held mortgages, recent ECB rate cuts have emboldened non-bank lenders to challenge the mainstream banks over the last year or so,” he said.
“Non-bank lenders rely more on wholesale funding than the mainstream banks so the lower ECB rates have given them more leverage to cut their rates. This has led to better mortgage deals for borrowers from non-bank lenders and bank lenders alike as mainstream lenders have in turn responded to the competition and choice which non-bank lenders have brought to the market.”
“The lower ECB rates have also helped to even out the playing field for non-bank mortgage lenders,” Mr Magee said. “It’s no surprise that a number of non-bank lenders have either joined the Irish market, or rebooted their offerings, since the ECB started to cut its rates more than a year ago.”
According to the Central Bank, 73pc of bank-held mortgages, 68pc of lending non-bank held mortgages, and 64pc of non-lending non-bank held mortgages had interest rates less than or equal to 4pc at the end of June. Interest rates on mortgages held by banks and lending non-banks were more heavily concentrated in the 3.5pc to 4.5pc range.
The bank pointed out that in June 2024, 22pc of mortgages held by non-lending non-banks had interest rates less than or equal to 4pc. A year later, the figure is nearly 64pc.
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