As the impact of the COVID-19 pandemic continues to ripple through the economy, one concerning trend is a sudden increase in the number of people falling behind on their mortgage payments. According to recent data, there has been a significant spike in the number of individuals going into mortgage arrears for the first time. This alarming trend has left many homeowners struggling to keep their heads above water as they navigate these uncertain times. In this article, we’ll take a closer look at the numbers behind this trend and explore some of the factors contributing to it. We’ll also examine what homeowners can do if they find themselves in danger of falling behind on their mortgage payments.
The Central Bank has reported an increase in the number of homeowners falling into arrears on their mortgages due to rising interest rates. This is the first such rise in early arrears in a decade, with an additional 2,300 people behind on payments for three months or more, mostly homeowners with mortgages sold to vulture funds. Statistics show that 46,743 accounts were in arrears at the end of last year, although many people in early arrears have managed to sort out their payments.
David Hall of Irish Mortgage Holders’ Organisation has seen a sharp increase in homeowners coming to the organisation in a pre-arrears situation due to a cost-of-living crisis and rising mortgage rates. A large proportion of mortgages in arrears are held by non-bank entities that have bought mortgages from Irish banks, with 77% of all residential accounts in arrears for over a year. However, Central Bank figures show a decline in long-term arrears, with less than 30,000 accounts in arrears for more than three months at the end of December 2022.
As these numbers indicate, the pandemic has had a significant impact on homeowners and their ability to keep up with mortgage payments. While government assistance programs have helped many, it is clear that some homeowners are still struggling. It is important for individuals to reach out to their lenders and explore options for assistance if they are experiencing financial hardship. As we continue to navigate these uncertain times, we must remain vigilant and supportive of one another to ensure that everyone can stay afloat.
