Ten interest rate increases by the European Central Bank have taken a significant financial and emotional toll on homeowners who are also clients of the Money Advice and Budgeting Service (MABS) in the South Leinster area.
A new study based on objective data and in-person interviews with 73 MABS clients shows the pressure placed on them by the mortgage rate increases.
Half of the group are paying in excess of €1,000 a month on their mortgage and 60% reported payments of at least €300 extra a month.
"At a minimum this equates to €3,600 extra annually that households need to find in their budget. At the higher end of the scale, the annual increase is as high as €6,000 and more," the study notes.
The report finds the increases are forcing families and individuals to make difficult choices to try and make ends meet.
Michelle O'Hara, the national spokesperson for MABS, said that such significant increases in mortgage repayments, coupled with the cost living increases has forced many individuals and families to make very difficult decisions.
"Three quarters of South Leinster MABS clients have reduced electricity used, home heating use, non-essential spending and grocery spend in order to afford their mortgage," she stated.
The report finds growing financial distress, and its knock-on impact on standard of living, has had a direct impact on personal wellbeing and future outlook.
Nine in every 10 mortgaged clients report that their wellbeing has been very/somewhat negatively affected by interest rate increases, and six-in-10 feel similarly negative about the prospect of their issues being resolved in the next 12 months.
But Michelle O'Hara says there are options available for people seeking help.
"Support is available through Abhaile which is a State-funded service provided free of charge to insolvent borrowers who are in danger of losing their home due to mortgage arrears," she advised.
The Abhaile Service can be accessed through MABS by calling the MABS Helpline on 0818 07 2000 Monday to Friday from 9am to 8pm, or visit www.mabs.ie to find your local office.
In response to high inflation, the European Central Bank began a programme of raising interest rates in July 2022. Ten interest rate hikes have been announced in the past 12 months causing interest rates to increase from 0% to 4.5%.
The typical household seeking advice and support from South Leinster MABS is older, aged 55+ years; working full-time; either divorced, separated, widowed or single; and has a total annual household income of less than €20,000.
