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The Distribution of Property Level Mortgage Arrears

Author

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  • McGuinness, Anne

    (Central Bank of Ireland)

Abstract

This economic letter uses new micro loan-level data from Irish banks to gain a better understanding of the financial difficulties in the Irish mortgage sector. The availability of these data provide a more granular view of borrower distress and clarifies mortgage arrears within the participating institutions. The letter generates a two-by- two matrix of negative equity and arrears, to identify the distribution of mortgage distress. This analysis finds that the majority of borrowers are current on their principal mortgage repayments. It also finds that while a large portion of borrowers may be in negative equity only 7 per cent of these borrowers are also in arrears.

Suggested Citation

  • McGuinness, Anne, 2011. "The Distribution of Property Level Mortgage Arrears," Economic Letters 06/EL/11, Central Bank of Ireland.
    • Handle: RePEc:cbi:ecolet:06/el/11
    as

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    File URL: https://centralbank.ie/docs/default-source/publications/economic-letters/economic-letter---vol-2011-no-6.pdf?sfvrsn=10
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    References listed on IDEAS

    as
    1. Kelly, Robert & McCarthy, Yvonne & McQuinn, Kieran, 2012. "Impairment and negative equity in the Irish mortgage market," Journal of Housing Economics, Elsevier, vol. 21(3), pages 256-268.
    2. Kelly, Robert & O’Malley, Terence, 2016. "The good, the bad and the impaired: A credit risk model of the Irish mortgage market," Journal of Financial Stability, Elsevier, vol. 22(C), pages 1-9.
    3. Kennedy, Gerard & McIndoe-Calder, Tara, 2012. "The Irish Mortgage Market: Stylised Facts, Negative Equity and Arrears," Quarterly Bulletin Articles, Central Bank of Ireland, pages 85-108, February.
    4. Kennedy, Gerard & McQuinn, Kieran, 2011. "Scenarios for Irish House Prices," Economic Letters 02/EL/11, Central Bank of Ireland.
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    Cited by:

    1. Thorvardur Tjörvi Ólafsson & Karen Á. Vignisdóttir, 2012. "Households’ position in the financial crisis in Iceland. Analysis based on a nationwide household-level database," Economics wp59, Department of Economics, Central bank of Iceland.
    2. Rory McElligott & Martin O'Brien, 2014. "The evolution of loan level data in Ireland," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Proceedings of the Porto Workshop on "Integrated management of micro-databases", volume 37, pages 18-23, Bank for International Settlements.
    3. Lydon, Reamonn, 2013. "Do households with debt problems spend less?," Economic Letters 02/EL/13, Central Bank of Ireland.
    4. Richard Waldron & Declan Redmond, 2016. "Stress in Suburbia: Counting the Costs of Ireland's Property Crash and Mortgage Arrears Crisis," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 107(4), pages 484-501, September.
    5. Clancy, Daragh & Cussen, Mary & Lydon, Reamonn, 2014. "Housing Market Activity and Consumption: Macro and Micro Evidence," Research Technical Papers 13/RT/14, Central Bank of Ireland.

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