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Switching slump leads Q3 mortgage drop

Figures from the main banks show that there was a sharp drop in mortgage drawdowns in the third quarter of 2023 compared with the same period last year.

Banking Payments Federation Ireland (BPFI) also released statistics on mortgage approvals for September, which also show big monthly and annual declines.

A total of 11,614 new mortgages to the value of €3.17 billion were drawn down by borrowers during the third quarter of 2023.

According to the BPFI, this represents a decrease of 21.8% in volume and 21.8% in value on the corresponding period last year. 

First-time buyers (FTBs) accounted for just over 60% of the market by volume and value. The volume and value of drawdowns linked to remortgaging or switching slumped by 80%.

Annual drop of 22% in approvals

Approval figures for September paint a similar picture, with 4,161 mortgages approved – just over 60% for FTBs. Mover purchasers accounted for just over 20% of the market.

The number of mortgages approved in September fell by just over 8% compared with August, and by 22% compared with September last year.

Mortgages approved in September were valued at €1.18 billion – down 9% month-on-month and almost 20% compared with a year earlier. FTBs again accounted for just over 60% of the total.

Re-mortgaging or switching activity fell by almost 76% in volume terms and by almost 79% in value compared with September 2022.

Approvals ‘peaked in summer’

BPFI Chief Executive Brian Hayes (pictured) attributed the slowdown to a continuing decline in switching activity, adding that mortgage levels for purchases of homes had remained stable.

He said that FTBs were “dominating” the market, with volumes and values running at their highest levels since 2007 and 2006, respectively, so far this year.

“We can see that although the monthly volume of mortgage approvals likely peaked during the summer months, the pipeline continues to strengthen, with 30,184 FTB mortgage approved in the 12 months ending September 2023,” Hayes stated.