The number of residential mortgages in arrears fell in the second quarter despite the impact of Covid-19.
Figures from the Central Bank show show that the number of owner-occupier mortgage accounts in arrears for less than 90 days decreased by 6,645 during the quarter.
“This decrease can be largely attributed to an unwinding of the increase in the previous quarter, in part owing to the introduction of Covid-19 payment breaks towards the end of the previous quarter,” the Central Bank said.
Lenders here began offering customers specific Covid-19 repayment holidays in March as restrictions to curb the spread of the virus resulted in hundreds of thousands of workers being temporarily laid off.
Just over 90,000 of account holders availded of Covid-19 payment breaks, representing around 10 per cent of loans to Irish borrowers. Although close to half of those have since returned to making full payments. This has helped limit the potential level of arrears.
The latest data show that at the end of June this year, there were 736,307 private residential mortgage accounts for principal dwellings held in the Ireland, with a value of €98 billion.
Of this, 56,792 accounts were in arrears, representing a decrease of 10 per cent over the quarter.
The rate of mortgages in arrears for more than 90 days remained unchanged at 5.6 per cent.
Acounts in long-term arrears, those behind by in their repayments by more than 720 days, decreased marginally to 26,228 and now account for 46 per cent of all owner-occupier accounts in arrears.
Banks, under pressure from regulators, are currently assessing which of the loans subject to payment breaks will not be able to return to regular payments while working on on restructuring and forbearance solutions for these borrowers.
The quarterly report from the Central Bank also contains information on legal activity and repossessions.
For the majority (or 61 per cent) of own-occupier accounts in arrears “no formal demand” has been issued, while 9,297 (16 per cent) are currently part of the legal process, which includes cases at Civil Bill lodgement stage, or where the case is still in the courts system
Of these, 6,511 accounts have been in the system for more than two years, 2,595 have been in the system for over five years and 1,060 accounts have been in the system for over ten years.
A separate Central Bank study on long-term mortage arrears, published by the Central Bank, revealed that a significant number are more than ten years in arrears, with such cases dating back to the last financial crisis.
While mortgage arrears have fallen in recent years as lenders sought better solutions and the economy picked up, a bigger concentration of those that remain are “increasingly concentrated in the longer-term arrears cohort”.
Of the 41,061 accounts currently in arrears of over 90 days, 64 per cent are in arrears for more than two years, up from 54 per cent in 2015, the study said.