Number of mortgages in long-term arrears still 'stubbornly high'

Irish Independent

14-05-2025

The agency which helps people tackle personal-debt problems points out that the average mortgage interest rate is now 3.82pc, but many households are paying more. The rate was 2.76pc in January 2022.
The ISI director Michael McNaughton says in the report that the combination of higher interest rates and the increased cost of living 'continues to put pressure on many households and individuals in meeting their mortgage payments as well as rental and utility bills'.
Last year there was a 28pc increase in Personal Insolvency Arrangements (PIAs), which address mortgage-related debt, according to the annual report. The number of Debt Relief Notices, which is a solution aimed at resolving unsecured debt, increased by 48pc.
Overall there were 1,544 new insolvency applications made, down slightly from the 1,565 recorded in 2023.
'Our data shows that most people using our services have relatively modest levels of unsustainable debt, with many opting for a Debt Relief Notice,' the ISI says.
'The decline in activity observed from 2020 through to 2022 was somewhat reversed in 2023 and this increased activity has continued into 2024,' according to the report.
'The 17pc increase in approval of Protective Certificates since 2022 is attributable to several factors including the significant increase in the cost of living, which coincided with a steep rise in interest rates.
'This combination created considerable uncertainty in individuals' personal circumstances and it is expected this will remain a further challenge in 2025.'
More people exited bankruptcy than were adjudicated bankrupt last year – 75 compared to 71.
The ISI points out that the trend of debtors who have established their centre of main interest (COMI) in Ireland being adjudicated bankrupt here has continued. This means more investigations have to be launched to look for assets that may be located outside the jurisdiction.
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'This trend has led to a growing focus on cross-border insolvency issues and investigations into assets outside Ireland's jurisdiction,' the report says. 'The complexity of managing such cases will present a significant challenge for our bankruptcy division over the coming years.'
Some 32 new investigations were undertaken last year, many resulting in the identification of undisclosed assets such as bank accounts, cars, properties, rental income, and transfers of assets prior to bankruptcy. Assets with a value of €6.4m were realised into 227 bankruptcy estates.
The Personal Insolvency Act was changed a decade ago to introduce a Section 115A, whereby the courts can be asked to review a proposed PIA that was rejected by creditors. The upward trend in applications continued last year, according to the ISI annual report, although at a more modest rate. There were 380 applications, up 7pc on the previous year.
'The increase in Section 115A applications may reflect an increase in activity generally, but may also reflect greater difficulties in proposal negotiations because of interest rate and cost of living increases,' the report notes.
The ISI says it has facilitated over 15,000 solutions for insolvent debtors since it was launched as an agency over 12 years ago.