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Nearly 12,000 mortgages with a total value of €3.1bn were drawn down by borrowers in the second quarter, according to the latest Banking & Payments Federation Ireland (BPFI) figures.
The 11,985 drawdowns between April and June represents an increase of a quarter (24.5%) from the same period a year ago, while the value of drawdowns in Q2 rose 40.6% year-on-year, reflecting annual inflation of 14.4% in the housing market.
First-time buyers remain the largest purchasing segment in terms of both volume (50%) and value (50.4%), and the value of the average FTB mortgage has risen 13% from last year to €263,312, the highest level on record ahead of the €251,831 figure for Q1 2008.
The BPFI also released mortgage approval figures for June, with a total of 5,960 mortgage authorised last month, including 2,675 for FTBs (44.9%) and 1,185 for mover-purchasers (19.9%).
The number of mortgages approved in June rose 11.3% from May and 14.5% from June 2021, and the value totalled nearly €1.7bn, of which FTBs accounted for €737m 44.2%) and mover-purchasers made up €401m (24.1%).
The value of mortgage approvals rose by 14.6% month-on-month and by 30.6% year-on-year, the BPFI said.
Switcher mortgage volumes, meanwhile, grew by 74.3% year-on-year to more than 2,600 mortgages while in June alone, the 1,789 mortgage switches approved, represented an 153% annual increase.
On an annualised basis, the number of re-mortgage/switching loans more than doubled between June 2018 and June 2022 to 9,824, and boosted by increased switching activity, the number of mortgage approvals in the year ending June 2022 reached 55,467, the highest level recorded since the data series began in 2011.
“The mortgage market continues to grow at a pace, with many potential mortgage holders more concerned by the need to find a home, than by the cost-of-living inflation or mortgage interest rate rises. The volume of applications from first-time buyers continues to grow month on month,” commented Trevor Grant, chair of the Irish Association of Mortgage Advisors.
“One of the biggest drivers of activity in the mortgage market is the increase in the number of those looking to switch, mainly looking to lock into a low rate/flexible fixed rate products. Whilst the majority of these customers are on variable rates, a growing number are on existing fixed rates, many of whom have been pleasantly surprised to discover that the exit penalty on the existing fixed rate is very low, or zero in many cases.
“While there may be some merit in certain homeowners moving from a tracker to a fixed rate (depending on their margin over ECB), we would caution those mortgage holders that this advice cannot be applied to everyone on a tracker rate.”
(Pic: Getty Images)
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