The Solution Waterfall: Insights From Irish Mortgage Distress Cases

Patrik Gorše, Thomas Joyce and Paul Lyons
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Patrik Gorše: Central Bank of Ireland
Thomas Joyce: Central Bank of Ireland
Paul Lyons: Central Bank of Ireland

No 15/SI/26, Central Bank Staff Insights from Central Bank of Ireland

Abstract: In this Insight, we examine how banks and Loan Servicing Firms (LSFs) approach resolving mortgage arrears using a sample of distressed mortgage cases from 2024. LSF portfolios contain deeper legacy arrears cases than retail banks. In our sample: Banks made greater use of short-term arrangements; LSFs made use of trial Alternative Repayment Arrangements (ARAs) while both offered long-term restructuring similarly. Borrowers at LSFs are approximately five years older than at banks (median age 56 vs 51) and: have higher mortgage balances; have accumulated higher arrears and; are currently repaying only 58% of their contractual amounts versus 80% for bank borrowers. 45% of LSF borrowers have no capacity to repay any of their principal balance, while another 22% would not be able to clear more than half their balance by retirement at current repayment rates. The equivalents are 18% and 16% for banks.

Date: 2026-10
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