First-time buyer mortgages and household incomes have reached their highest levels on record.
That’s according to the latest Mortgage Market Profile Report from the Banking and Payments Federation Ireland (BPFI) for H1 2023.
According to the report, the median first-time buyer mortgage jumped €20,000 in the first half of the year compared to the same period last year, rising to €270,000.
The median mover mortgage was also up by €4,000 to €290,500 in the first six months of the year.
Household incomes were also on the rise in the same period, the report revealed. Median basic household incomes for first-time buyers now stand at almost €82,000, up 6.5% from the corresponding period last year.
Meanwhile, median basic household incomes rose by 5.2% for mover mortgages to more than €111,000.
The BPFI also outlined that the median income of first time buyers on existing property mortgages, was €75,000, an increase of €4,000 from the first half of 2022.
The median income on new property mortgages jumped by more than €7,000 year-on-year to over €93,000.
More than half of mortgage drawdowns by first-time buyers now involve high-value mortgages of over €250,000, the BPFI said.
Around 56% of all drawdowns come from first-time buyers with household incomes of over €80,000. These proportions are now the highest recorded by either the BPFI or the Department of Housing.
The median age of first-time buyer borrowers has also risen to 35 for the first time.
The share of first-time buyers borrowers who are aged over 35 increased to 44%. This reflects an increase of 8% from 2019, as well as a 27% jump from 2004, Department of Housing data shows.
Just 20% of first-time buyer borrowers today are under the age of 30 years, a sharp decline from 60% of such borrowers in 2004.
The BPFI said this may reflect high borrower incomes as incomes typically rise in line with age.
Loan terms remain stable, according to the research. The median loan mortgage term for first-time buyers has been at 30 years for over a decade, with the share of mortgage loans with terms longer than this making up about 40% of the total.
The longest loan term is now 35 years.
While the median first-time buyer mortgage was up across all regions in the country, it increased by more than €26,000 in Kildare, Limerick and Meath.
In the Midlands, Border, South, Midwest and West regions, the median mortgage for first-time buyers was less than €215,000, while the median income was €70,000 or less.
In Dublin and Kildare, the median first-time buyer on new property mortgages surpassed €100,000 in the first half of the year.
“Our latest Mortgage Market Profile continues to point to a trend we’ve seen emerge in recent years, which is that first-time buyers are very much dominating the mortgage market, despite headwinds from rising property prices and European Central Bank interest rate increases,” BPFI chief executive Brian Hayes said.
"In H1 2023 there were 11,313 FTB drawdowns valued at almost €3.2bn which were the highest H1 FTB volumes and values since H1 2007.”
"These figures along with the positive mortgage approvals pipeline we’ve seen in recent months establishes a solid foundation for a strong end to the year.
““In terms of delving into the details behind these figures, this report provides important insights into the mortgage market in Ireland and gives us a very clear picture of the market across many dimensions, from age and type of house to geographic location.
“We previously highlighted that the average FTB mortgage drawdown reached the highest level on record in Q2 2023 at more than €284,000. Today’s report shows that the median FTB mortgage increased by €20,000 year on year to €270,000 in H1 2023 reflecting higher housing prices. It’s interesting to note that over that same period FTB household incomes increased by 6.5% to €82,000. In fact, as the report shows, as of 2022 more than half of FTBs had loans over €250,000 and total incomes over €80,000,” he said.
