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Interest-rate rises drive mortgage-market shift
Pic: RollingNews.ie

24 Nov 2022 / property Print

Interest-rate rises spark mortgage-market shift

Figures from the organisation that represents the main banks show a big increase in non-purchase mortgages, as people try to minimise the impact of rising interest rates.

Banking and Payments Federation Ireland (BPFI) said that banks approved 5,349 mortgages in October.

While this figure was little changed from September, it represented a 17% increase compared with October last year.

The value of approved mortgages in October was just over €1.46 billion – down 0.7% from September, but up 23% year-on-year.

New deals

Non-purchase mortgage activity – including switching and top-ups – more than doubled in volume and value over the 12-month period.

In October, banks approved 1,910 of these types of mortgage transactions, worth €497 million.

Brian Hayes (BPFI chief executive, pictured) said that non-purchase mortgages had accounted for more than one-third of monthly approvals for the first time since 2011.

“It is clear that customers are actively managing their mortgages by seeking out new deals to minimise the impact of ECB interest-rate decisions,” said Hayes.

He pointed to separate data from the Central Bank of Ireland that showed that the value of mortgages renegotiated on fixed-rate terms more than trebled between the third quarter of 2021 and the third quarter of this year.

“In contrast, FTB [first-time buyer] approval volumes were the lowest for October since 2019,” Hayes said.

Gazette Desk
Gazette.ie is the daily legal news site of the Law Society of Ireland