First-time buyers now account for over half of mortgage approvals

First-time buyers accounted for over half the value and volume of mortgages approved in February, according to a report from the Banking and Payments Federation Ireland (BPFI).

The group’s latest figures show a total of 3,651 mortgages – worth €902 million – were approved in February this year. This was up nearly 4 per cent on the same month last year.

First-time buyers accounted for almost 54 per cent (1,969 mortgages), while mover purchasers accounted for 25 per cent (903).

The pick-up in mortgage approvals against the backdrop of the pandemic – a trend seen over the last few months – was not expected.

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The value of mortgage drawdowns in the final three months of last year reached its highest quarterly level since the fourth quarter of 2008.

"Our latest approvals figures show another month of solid albeit slower growth, especially for first-time buyers who now account for over half of all approvals both in volume and value terms," said BPFI chief executive Brian Hayes.

“This growth is taking place against a backdrop of continued Level 5 restrictions throughout February which underlines lenders’ continued support for the mortgage market, particularly when we consider that February 2020 was a relatively normal month preceding any Covid restrictions,” he said.

The BPFI’s report also highlights a significant increase in mortgage holders switching providers.

“It is interesting to note that remortgage/switching was the fastest growing segment in February, with volumes up 15.1 per cent year-on-year to more than 500,” Mr Hayes said.

Customers

“Lenders are supporting large numbers of customers who want to switch. In the past three years lenders have approved almost 17,900 remortgages valued at €4.2 billion.”

A recent Central Bank report suggested mortgage holders here could save more than €10,000 by switching lenders, but the vast majority of consumers were opting not to change.

The research found that 61 per cent of eligible mortgage holders stood to save more than €1,000 within the first year if they switched providers, and more than €10,000 over the remaining term of the loan.