Mortgage arrears to peak this year

Mortgage arrears to peak this year

Mortgage arrears will peak this year, according to the credit ratings agency Fitch.

In its regular report on the property market here, it says arrears in residential mortgages hit 18% at the end of last year. That’s up from 16.2% in the third quarter of 2013.

The arrears figure is higher than the official Central Bank measure of those struggling to repay their loans, though Fitch is looking at a smaller pool of loans than the bank.

But Fitch does believe the rate of increase in loans in arrears will peak in the current quarter of the year before declining.

It bases that claim on figures showing early stage arrears declining and banks beginning to work out long-term solutions for those in difficulty.

Andrew Currie, managing director at Fitch’s structured finance team, expects the number of borrowers in long-term mortgage arrears to peak this year. “There has been a slowdown in the number of new borrowers getting into mortgage distress,” said Mr Currie. “Recent legislative changes provide lenders with more certainty that they have effective tools to handle the most unco- operative borrowers.

“The combination of fewer new arrears cases and our expectation of a slow pick-up in loan workouts means the peak in late-stage arrears is now close.”

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