Almost 45,000 householders are now in arrears on their mortgages and the number of homes being repossessed is rising, according to official figures.
The Central Bank said 44,508 mortgage accounts were more than 90 days behind with repayments by December 31 last year. This was up from 40,472, or 5.1% of all mortgages, at the end of September.
Separate figures from the Irish Banking Federation show the market for new mortgages has stagnated.
Just 5,624 new mortgages were originated in the fourth quarter of 2010, compared to 55,618 mortgages originated in the same period of 2005.
The mortgage arrears figures are expected to continue to rise following the increase in interest rates in the last two months.
"What is of particular concern is the latest arrears reports do not factor in the most recent interest rate increases announced by several banks (which are still ongoing) on their standard variable rate mortgage customers. In some cases, lenders have increased interest rates by 1%
"Equally, it does not factor in the affect of the introduction on the Universal Social Charge, which has resulted in a reduction in net take-home pay." said Frank Conway, director with MoneyCoach.ie.
Figures from the Central Bank show that the percentage of mortgages which are behind on their repayments climbed to 5.7% by the end of 2010. There was also an increase in the number of repossessions.
Mortgage arrears now stands at €8.6bn
Mortgage holders in arrears owe a total of €8.6 billion, up from €7.8 billion three months earlier. Of the 44,508 mortgages in arrears, more than 31,000 are more than 180 days behind with repayments.
The Central Bank added that another 35,205 mortgages have been classified as 'restructured' but performing.
This means people in difficulty with mortgages have made arrangements with their lender to make it easier for them to make repayments, such as paying interest only for a period of time.
More than 100 homes repossessed in three months
Official figures show that 106 properties were repossessed during the final three months of last year, compared with 81 in the third quarter.
Mortgage lenders held 585 repossessed properties by the end of 2010, up from 521 at the start of the period.
They managed to sell 42 properties during the three-month period.
There was a big increase in lenders applying to the courts to start proceedings over mortgages which were in arrears. The 297 cases in the quarter represented an increase of more than 40% from the previous three months.
Volume of mortgage lending down 43% last year
The Irish Banking Federation/PwC mortgage market profile today showed that a total of 5,624 new mortgages - worth €982m - were issued in the last three months of 2010.
A total of 28,000 new mortgages were issued for all of last year at a value of over €4.75 billion.
The profile reveals that the volume of new lending in 2010 is down 43.5% on 2009, while the fourth quarter figures are 22.5% lower than the third quarter.
First time buyers and mover purchasers now account for 77% of the market by value and 67% by volume.