Late loan payments continue to rise

The Central Bank of Ireland reports that the total amount of mortgages that are now classified as long-term arrears have hit record highs, topping the charts at almost 6 billion euro. There are many types of properties that can and have become part of this number, but the largest group tends to be that of more residential properties.

In the previous quarter, mortgages in arrears were down significantly. Sadly, the largest category in mortgages in arrears, residential properties that are two years or above in late payments, is still increasing. The buy-to-let sector has been the largest subcategory of residential properties in arrears; 17.62% of the total is in arrears.

In April 2019, only 118 of all applications of mortgages for buy-to-let properties were approved while in April 2018 154 mortgages were approved. There was a 30% decrease within the same months separated by only one year, according to the Banking and Payments Federation Ireland (BPFI).

This huge scale down may be due to Brexit, or perhaps the seeming unreliability of buy-to-let properties ability to bring in …

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Buy-To-Let Homes in Arrears

Why have recent reports been showing an increase in the number of mortgages being in arrears? More specifically the interest-only mortgages? And furthermore specifically, those on buy-to-let homes?

Interest only mortgages are typically mortgages that are seen to be taken by investors searching for a more affordable option to the standard mortgage scheme.

So, why has it been found that those who hold interest-only mortgages are more likely to be in arrears today?

In a recent study by the Central Bank, it was found that this is the case for investors on an interest-only mortgage deal for buy-to-let homes.

The surplus in interest-only mortgages that we are seeing today was initiated by buyers of high end and expensive properties during the last housing boom.

It is predicted now, that we will see a strong increase in the amount of homeowner to go into arrears as nearly a third of the interest-only mortgages have plans to make the switch to paying a traditional capital and interest mortgage from present 2018 to 2022.

It is not of a …

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