There has been a significant increase in mortgage approvals, while a major spike in mortgage switching has also been recorded, new figures show.
In February, 3,894 mortgages were approved including 2,053 mortgages for first-time buyers (FTBs), while mover purchasers accounted for 848.
According to the Banking & Payments Federation Ireland (BPFI) figures, the number of mortgages approved rose by 7.5 per cent month-on-month and by 6.7 per cent compared with the same period last year.
The value of mortgage approvals rose by 10.3 per cent month-on-month and by 13.9 per cent year-on-year.
@BPFINews have today published its latest Mortgage Approvals Report for February 2022 with strong growth in mortgage approvals with switching volumes jumping 42% year on year as consumers shop around.https://t.co/55OkEgIzrJ#mortgageapprovals #mortgages pic.twitter.com/3euCfD6NBG
— Banking & Payments Federation Ireland (@BPFINews) March 29, 2022
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Speaking about the report, Brian Hayes, chief executive, BPFI said: “Our latest mortgage approvals data shows February was a strong month for mortgage approvals activity especially for first-time buyer approvals which grew by 4.3 per cent in volume terms and 10.7 per cent in value terms year-on-year.
“This all points to a continued strong pipeline for drawdown as the year progresses.”
The report also shows a 42 per cent volume increase in re-mortgage/switching.
“This increase in switching activity is a reflection both on the competition in the market right now and the fact that mortgage customers are actively shopping around for these better rates,” Mr Hayes explained.
“This comes at a time when mortgage customers are increasingly using fixed-rate mortgages.
“The latest data from the CBI for example suggests that fixed rate mortgages (fixed for more than one year) accounted for almost half (46 per cent) of outstanding mortgage value at the end of 2021, up from 25 per cent three years earlier.
“With consumers keenly aware of the rising cost of living, we encourage mortgage customers to review their rate type and level regularly and compare them with the other products available.”
Seeking certainty
Managing director of doddl.ie, Martina Hennessy, has said that the latest figures regarding mortgage switching indicate that householders are looking for more certainty.
“The spike in mortgage switching in February reflects consumers' uncertainty in the interest rate market, resulting in mortgage holders looking to switch and lock in low fixed rates, as well increased switching activity driven by Ulster Bank and KBC exiting the mortgage market,” Ms Hennessy said.
“Soaring household costs has resulted in many reviewing big-ticket items like mortgage repayments, which is the best place to start if seeking to reduce outgoings.
“By locking in some of [the] lowest fixed rates available in 12 years, many consumers are saving several hundred every month - up to €405 per month if you owe €300,000, for example.
“Plus, as loan to values reduce - with double digital house price inflation in 2021 - the opportunity is ripe for mortgage holders to review their mortgage interest rates and the competitive options now available to them.”
