43% of Irish mortgage borrowers are still in negative equity, according to a study by ratings agency Standard & Poor’s.
The report says 59% of mortgage holders who are in arrears are also in negative equity, a far higher proportion than those who are current on their mortgage payments.
In addition, mortgage loans from 2007 and those in the Border and West regions record negative equity percentages at or above 50%.
S&P also states that borrowers with buy-to-let (BTL) loans and those with longer initial loan terms are more likely to be in negative equity.
However the ratings agency said: “Based on our calculations and forecasts, moderate growth in house prices should lead to a gradual decline in negative equity, with a fifth of mortgage borrowers' current negative equity positions turning positive within two years.”
Based on its analysis of more than 100,000 mortgage loans backing residential mortgage-backed securities (RMBS) that it rates, S&P’s Ratings Services estimates that nearly half of Irish mortgage borrowers are in negative equity.
This sample of mortgage loans represents about 18% of the outstanding Irish mortgage market by volume.
Earlier, new figures showed that a total of 1,951 mortgages were approved in the three months to the end of February, down 15.1% on the same time last year.
The Banking and Payments Federation said the mortgages had an aggregate value of €371m, down 14.6% on a yearly basis.
More than half of the approvals were for first-time buyers, while mover purchasers accounted for almost 30%.
The federation noted that re-mortgage or switching has increased its share of mortgage activity to about 8.5% of the value of mortgages approved in early 2016 from about 4.6% in the same time of last year.
The figures come amid calls for the Central Bank to ease its lending restrictions for those who wish to obtain a mortgage.
