People choosing to borrow less than they could with mortgages to reduce payments

First time buyers and mover purchasers have chosen to borrow less than they could have in order to reduce payments, the latest BPFI mortgage report reveals.

This comes as little surprise since higher house prices and larger loans meant average mortgage repayments have increased. FTBs are now paying €1,020 monthly on the average, whereas before they were paying €910. Meanwhile the repayments mover purchasers are making are now €1,361, €150 more than before.

The report compares average monthly mortgage payments between H1 2020 and H1 2022. Another trend that was revealed in the report is that borrowers either seek longer loan terms to have a lower monthly repayment, or are maximising their deposits to have to borrow less.

Read more: Is now the right time for me to apply for a mortgage? Specialist comments on Irish market amid reported repayments hike

Brian Hayes, the CEO of BPFI - which is the umbrella organisation for all retail banks - encouraged customers to see if they are eligible for governmental support schemes to deal with the increase.

While Dublin remains the largest single market in Ireland, it has the lowest share of FTBs - only 13 per cent. Perhaps because it has the highest property values in the country for both FTBs and mover purchasers - €375,000 and €575,000 respectively.

Chairperson of the Association of Irish Mortgage Advisors Trevor Grant told RTÉ this increase in mortgage repayments largely represents the necessary growth in the mortgage size needed to buy a property in the current market. "If house prices increase by 10%, so too does the mortgage required to buy that home," he said.

"There's an assumption that, just like back in the Celtic Tiger days, everyone wants to borrow the maximum amount they can. However, this report shows borrowers these days are far more prudent."

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