The Household Credit Market Report 2018.

There’s unlikely to be such demand for the Household Credit Market Report that it crashes the Central Bank’s servers but nonetheless, some bean counting Bobs and Julies certainly put a lot of effort into telling us how indebted we all are.

What’s interesting about the report is not the headline stats – everybody with an eye on the property market could probably guess that new mortgage lending has increased but it does quantify it – it stood at €2.01 billion in Q2 2018, a 22% increase since Q2 2017.

We could also take a guess that the average first time buyer mortgage in Dublin in H1 2018 is larger than elsewhere in the country, standing at €273,953 vs €185,987 which is quite a significant difference (47%) even taking into account the wage differential between FTBs in Dublin and outside the capital – €85,334 vs €66,728 (a 28% difference).

But in terms of the human cost, the report paints a picture of longer mortgage terms taken out at a later stage in life than before. The average FTB mortgage had a term ranging around the 30 year mark and the average age was around 34 years old when it was drawn down. In fact, around half of all FTBs had mortgage terms ranging from 30-35 years in H1 2018, meaning many people may be approaching retirement or already retired before their mortgages are fully paid off.

However, the numbers on longer loan terms has fallen since the ‘boom’ – perhaps reflecting both lower house prices or tighter lending criteria when you consider that in 2006 which was just before the property crash that just under two thirds of FTBs had loan terms of over 30 years.

Mortgage arrears have also decreased. In Q2 2018, there were 63,402 mortgages in arrears (over 90 days past due) which accounted for 7.5% of all mortgage loans. This has fallen since the dark days of the property crash when in Q3 2013, 14.2% of mortgage loans were in arrears. The highest rates of mortgage arrears 90 days past due occurred in the border counties – Donegal, Leitrim and Cavan with Longford also featuring.

So where does that leave us? Basically, most FTBs are in their 30s and taking on longer mortgage loan terms when they manage to purchase a house with those in Dublin having to pay more for their homes as well. The slight good news is that mortgage arrears have dropped although the ratio still works out at approximately 1 in 13 mortgages experiencing difficulties which is still a huge financial and human cost for those involved.

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