Exploring missed mortgage payments in the first year of monetary tightening

Sameer Shaikh, Paul Kilgarriff and Edward Gaffney
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Sameer Shaikh: Central Bank of Ireland
Edward Gaffney: Central Bank of Ireland

No 9/FS/23, Financial Stability Notes from Central Bank of Ireland

Abstract: This Note assesses entry rates of mortgages into arrears since 2012 using loan-level data for Irish domestic banks, with a focus on the monetary tightening period from June 2022 to June 2023. Entry into mortgage arrears reached very low levels by mid-2022 and has remained low, though increasing slightly in 2023. Mortgages with a history of performance problems are more likely to enter arrears, as are mortgages that originated before 2009 and older borrowers. Since 2022, tracker-rate mortgages have been more likely to miss payments than other mortgages. Although most flows into arrears are among mortgages with historical repayment challenges and tracker mortgages, 16 per cent of borrowers entering arrears were on fixed or standard variable rates with no history of mortgage non-performance.

Date: 2023-11
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