Older People Grappling with Mortgage Arrears

Figures supplied to me by the Central Bank and the Minister for Finance suggest there are significant numbers of older people still paying off their mortgages; and even more significantly, a worrying number of these mortgages are in arrears.

The Irish Times published an article detailing this, and it can be read here. They also published an article outlining a case study of an older person with mortgage debt, and this can be read here.

Of people over 70 years old (those born before 1950) there are 23,165 who still have mortgages with the five main retail banks (Bank of Ireland, AIB, Ulster Bank, Permanent TSB and KBC). There are 2,243 of those loans in arrears, which is an arrears rate of 9%.

Given that the people involved are over 70 years old, we must ensure they are treated with care and consideration and that there in no situation where a bank is threatening an older person with eviction from their home. There is little to no social provision for older people in this situation, so if the Banks chose to act in an aggressive manner, and older people lost their homes, it would be a social catastrophe.

A further 1,726 mortgages are on an interest only basis – effectively 17.1% of mortgages held by those over 70 years old are not being repaid, or no capital is being repaid.

The size of these mortgages is also very worrying, and the attached tables gives a more detailed analysis of the data in relation to the five main retail banks.

Worryingly the attached data does not include the mortgages of those that were sold off by the five main retail banks. We do not know how many mortgages of older people are in the hands of investment funds and vulture funds. We do not know how these funds will treat older people who are in arrears. It is the responsibility of the Minister for Finance and the Central Bank to ensure that older people are protected from the threat of eviction.

The data also shows that those in their 50s and 60s, who had mortgage problems during the Crash, are still struggling. While there has been an assumption that older people close to, and in receipt of, the State pension are generally mortgage-free homeowners, it is clear that this is no longer true.

The data concerned is not normally collated, and I asked for this work to be specially commissioned, because of the stories I have been hearing of older people worrying about their mortgage. The Government is talking very widely about a just transition for workers in Bórd na Mona and the ESB, and it’s time they apply this principle of a just transition to older people.

The data provides food for thought concerning our current model of renting, and people taking out a mortgage later in life. They may well be left struggling to pay off their own mortgage in their later years.

Currently there are many people in their 30s entering large value, 35-year mortgages. Many will not pay off these mortgages until they are 70 and older. These same people many not have substantial pensions to look forward to either. Government and the Central Bank need to think about these potential demographic timebombs which may put families and individuals in an extremely precarious financial position now and in the future