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Average mortgage rises by €110 per month or €1,320 per year for First Time Buyers. 

The latest Mortgage Market Profile Report, published today by Banking & Payments Federation Ireland (BPFI) shows the average monthly mortgage repayment (excluding self-builds) rose by more than €110 for First-Time Buyers (FTBs) between H1 2020 and H1 2022.

The rise brings the average mortgage for first time buyers to €1,020  per month – with a total expected yearly increase of €1,320 in total for first time buyers.

The average mortgage for mover purchasers rose by more than €150 to a repayment of €1,361 per month for mover purchasers over the same period, reflecting higher house prices and larger loans, the report found.

This latest report in the series, (available here) which looks at the profile of borrowers, their loans and property types on a national basis as well as across regional basis, analyses how the market for home mortgages has changed since before the Covid-19 pandemic and the previous lending peak of 2005 and drawdown peak of 2008.

Key findings from the report show:

  • First-time buyers (FTBs) buying existing properties accounted for almost half (48%) of home mortgages (mortgages for borrowers buying or building homes) in H1 2022
  • The median property value, loan value and monthly repayment (excluding self-builds) for FTB mortgages on existing properties each rose by about 10% between H1 2021 and H1 2022
  • One in five FTBs and two in five mover purchasers borrowed less than they could under CBI mortgage rules
  • The median age of the main mover purchase borrowers increased to 43 while the median FTB age was unchanged at 34.
  • Overall, the mortgage market continued to grow strongly in H1 2022 with drawdown volumes up by 17% year on year to 21,895, the most since 2009. First-time buyers (FTBs) led the way with 11,178 drawdowns, the highest H1 volumes since 2007.

Some borrowers are minimising repayments through longer loan terms while others are opting to maximise deposits to minimise the amount borrowed.

Commenting on the report and in particular the rising cost in repayments Brian Hayes, Chief Executive, BPFI said: “In the face of rising residential property prices and wider increases in the cost of living in the first half of 2022 and higher European Central Bank interest rates in the second half, there is understandably an intense focus on mortgage repayments at present. Prospective borrowers aiming to buy a home have options to minimise their regular repayments.”

“The latest Mortgage Market Profile Report, which includes mortgages drawn down before the ECB began increasing its interest rates, looks at two of those options: longer loan terms and larger deposits. One way to reduce payments is to look for longer loan terms, particularly for FTBs as they are much younger than movers. Interestingly however, there is no evidence of this as latest data which show that the share of FTB mortgages with loan terms of 35 years in H1 2022 was 26% and this share has been stable between 22% and 28% since 2015.”

Mr Hayes continued: “Another option to reduce payments is to maximise deposits in order to minimise the amount borrowed. In this context the report shows that between January 2020 and June 2022, almost one-fifth (17%) of first-time buyer (FTB) mortgages and nearly two-fifths (38%) of mover purchasers borrowed less than they could have under the Central Bank of Ireland (CBI) loan-to-value (LTV) and loan-to-income (LTI) lending rules. These borrowers chose to contribute much larger deposits than they needed to under the CBI limits. This analysis shows that the borrowing choices made by home buyers have significant implications. It is clear that borrowers are considering both how much they are permitted to borrow but how much they can afford to borrow and how they can minimise the costs. We also encourage customers to review their eligibility for the government schemes available to FTBs such as Help to Buy or the First Home Scheme.”

Regional differences across the country

The BPFI Mortgage Market Profile Report provides a wealth of data on the regional breakdown of the mortgage market. Dublin remains on top with 30.3% of home purchase mortgages in the twelve months ending June 2022. Outside Dublin, Cork is the largest single market with 11.2% of mortgages, followed by Galway and Limerick with 4.5% and 3.78% each.

Key regional finding from the report include:

  • FTBs buying or building new properties accounted for only 13% of home mortgages in Dublin in H1 2022, the lowest share of any region. At €375,000 and €575,000, Dublin had the highest FTB existing and mover purchase property values in the country.
  • Wicklow had the country’s highest median basic household incomes, monthly repayments (excluding self-builds) and property values for FTBs buying or building new properties.”
  • In Cork the median FTB monthly mortgage repayment on new properties (excluding self-builds) fell by 1% year-on-year to €1,220, the only region in which median repayments fell. However, the median FTB repayment on existing properties rose by 11% to €915.
  • At €260,000, the median property value for mover purchase mortgages in Galway was the highest outside the eastern counties of Dublin, Wicklow, Kildare and Meath.
  • In Limerick, the median FTB monthly repayment on new properties rose by 18% year on year, the fastest increase in the country. At €1,153, this was the fifth highest FTB new repayment in the country after Wicklow, Dublin, Kildare and Galway.
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