Trends in Personal Credit: Q3 2015

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Fixed rate mortgages on principal dwelling houses grew by 33.4 per cent in the year to September 2015. While this held for all fixed maturity categories, it was most pronounced for loans fixed between 1 and 3 years.

• The total amount of loans outstanding for principal dwelling houses (PDHs) fell by €61 million during Q3 2015 to stand at €60.3 billion at end-September 2015. Loans for PDHs declined on an annual basis by 0.8 per cent at end-September 2015 following a decrease of 1.4 per cent at end-June.
• Within the PDH category, floating rate loans showed an annual decline of 3.9 per cent while fixed rate loans showed an increase of 33.4 per cent; this was the largest annual increase since the series began in December 2011.
• The total amount of loans outstanding for buy-to-lets (BTLs) fell by €273 million in Q3 2015 to stand at €15.5 billion. BTL loans declined by 8.1 per cent on an annual basis as at end-September 2015; this follows a decrease of 6.3 per cent at end-June.

Credit Advanced to Private Households – Loans for House Purchase

The analysis below relates to on-balance sheet lending, unless otherwise indicated.

• Loans for PDHs, which accounted for 79 per cent of outstanding loans for house purchase, fell by €61 million over the quarter to stand at €60.3 billion at end-September 2015. The annual rate of decline in loans for principal dwellings was 0.8 per cent at end-September 2015, following a 1.4 per cent decline at end-June. A further €28.4 billion of securitised PDH mortgages, which continue to be serviced by resident credit institutions, was outstanding at end-September.
• PDH floating rate mortgages declined by €900 million (1.6 per cent) during the quarter to stand at €53.7 billion at end-September 2015. Standard variable rate mortgages, which recorded a €776 million (2.7 per cent) decrease in Q3, accounted for 46 per cent of outstanding PDH loans at the end of the quarter. Tracker mortgages, which accounted for 40 per cent of PDH loans at end-September 2015, also declined by €216 million (0.9 per cent) over the same period. Conversely, mortgages fixed for up to one year, which accounted for just 3 per cent of total PDH loans, showed an increase of €92 million (4.9 per cent) during Q3 2015. The floating rate category (which includes mortgages fixed for up to one year) recorded a decrease of €2.2 billion (3.9 per cent) in the four quarters to end-September 2015; this followed an annual decline of 3.1 per cent at end-June. In total, floating rate mortgage categories accounted for 89 per cent of the outstanding amount of loans for principal dwellings at end-September. For securitised mortgages, the share of floating rate mortgages for principal dwellings was slightly higher at 95 per cent (Chart 3).
• PDH fixed rate mortgages increased by €839 million (14.6 per cent) during Q3 2015 to stand at €6.6 billion, although accounting for a relatively small proportion of total mortgages outstanding. The annual increase of 33.4 per cent is the largest since the series began in December 2011. This contrasts sharply to the same period last year when a decrease of 10.0 per cent (€512 million) was recorded. Developments in Q3 2015 were driven by increases across all fixed maturity categories. The predominant driver was an increase of €762 million (29.7 per cent) in the over one and up to three year category. Mortgages in the over three and up to five year and over five year categories grew by €69 million (4.2 per cent) and €7 million (0.5 per cent), respectively.
• Loans for BTL properties, which represented 20 per cent of loans for house purchase, stood at €15.5 billion at end-September 2015. The annual rate of decline in loans for BTLs was 8.1 per cent at end-September 2015, following a 6.3 per cent decline at end-June. Total BTL loans outstanding stood at €22.1 billion at end Q3 2015, when securitised mortgages are included.
• The outstanding amount of loans for buy-to-let residential properties fell by €273 million (1.7 per cent) over the quarter, following a decline of €453 million (2.8 per cent) in Q2. This quarterly development mainly reflected a €278 million decrease in floating rate mortgages; of this, €271 million related to tracker mortgages. Mortgages fixed for up to one year also declined by €10 million. Floating rate mortgages accounted for 99 per cent of the outstanding amount of loans for buy-to-let properties at end-Q3. These floating rate loans were composed of two thirds tracker mortgages and one third standard variable mortgages.
• Loans for holiday homes/second homes accounted for 1 per cent of loans for house purchase at end-Sept 2015. Floating rate mortgages accounted for 96 per cent of the outstanding amount of loans for this category. Of these floating rate loans, 59 per cent were tracker mortgages and 40 per cent were standard variable mortgages. The annual decline in loans for holiday homes/second homes was 1.8 per cent at end-September 2015.

Note

Changes in outstanding amounts need to be interpreted with caution, as they are increasingly influenced by reclassifications, including loan sales and changes in the reporting population. Quarterly transactions and annual growth rates are better measures of activity over any given period.

Further information

The extensive set of Private Credit Statistics tables, along with a detailed set of explanatory notes are available here.

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The extensive set of Personal Credit Statistics tables, along with a detailed set of explanatory notes are available here. Recent data are often provisional and may be subject to revision. A list of credit institutions resident in the Republic of Ireland (i.e. the population covered by these statistics) is available here.