There was a softening in mortgage approval activity last month, with approval volumes down 2.5 per cent year-on-year, data from the banks shows.
Banking and Payments Federation Ireland (BPFI), which is the representative group for the banks, said the number of mortgages approved fell by 17 per cent month-on-month and by 2.5 per cent compared with the same period last year.
A total of 4,536 mortgages were approved in August, with first-time buyers approved for 2,822 (62.2 per cent of total volume), while mover purchasers accounted for 825 (18.2 per cent).
Mortgages approved were valued at €1.45 billion, of which first-time buyers accounted for €920 million (63.2 per cent) and mover purchasers for €318 million (21.8 per cent).
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The value of mortgage approvals fell by 17.8 per cent month-on-month and rose by 4.1 per cent year-on-year.
Re-mortgage/ switching activity rose by 13.8 per cent in volume terms year-on-year and by 30.4 per cent in value in the same period.
Trevor Grant, chairman of Irish Mortgage Advisors, said significant increase in the volume and value of re-mortgage and switching activity “reflects that not only are more people switching but also that borrowers are switching larger mortgages on average”.
“Switching activity in the mortgage market has been rising steadily, driven by a combination of factors,” he said.
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“Many borrowers are reaching the end of fixed-rate terms, while others, constrained from moving due to the ongoing property shortage, are choosing to release equity instead. Both of these factors prompt homeowners to review their mortgage options.”
Mr Grant said borrowers switch for a variety of reasons. “Some are looking for more competitive interest rates, particularly when their existing lender’s offer is no longer market-leading,” he said.
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“Others are taking advantage of a lower loan-to-value ratio, or are opting for a green mortgage rate when making energy-efficient improvements to their home.
“Equity release is another driver, allowing homeowners to access funds tied up in their property without having to sell.”
He said opportunities in the market are strongest where lenders are less competitive or where borrowers’ circumstances have changed, such as when there is an improvement in the property value, a reduction in outstanding debt, or changes in household income.
“These situations can allow borrowers to negotiate better terms or consolidate multiple objectives, such as lowering monthly repayments while funding home improvements,” he said.
“Overall, switching is not just about chasing the lowest interest rate. It is about homeowners reviewing their position, seeking better value, improving their financial flexibility, and in some cases, using their property to support broader financial goals.
“The combination of fixed-rate maturities, a constrained housing market and rising property values means that switching activity is likely to remain strong in the months ahead.”
