The Distribution of Property Level Mortgage Arrears

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.