Average first-time buyer mortgage drawdown increases to more than 260,000 euro

The average first-time buyer mortgage drawdown increased to more than 260,000 euro in the second quarter of this year, a new report has found.

New figures from the Banking & Payments Federation (BPFI) showed the average mortgage drawdown by first-time buyers (FTBs) was 263,312 euro, the highest level since the data series began in 2003.

The previous record was 251,831 euro in the first three months of 2008.

The BPFI report also showed a total of 11,985 new mortgages worth some 3.1 million euro were drawn down by borrowers during the second quarter of this year.

This represents a 24% increase in volume and a 40% in value on the same period last year.

FTBs remained the single largest segment by volume (50%) and by value (50.4%).

Almost 6,000 mortgages were drawn down by first time buyers in the three months to the end of June, up 22% year on year.

Switcher mortgage volumes grew by 74% year on year to more than 2,600 mortgages in the same period.

In comparison, the volume of residential investment letting (RIL) mortgage drawdowns decreased by 9.3% year-on-year to 225.

The BPFI figures also showed growth in mortgage activity last month with switching emerging as a key driver in the mortgage market growth.

A total of 5,960 mortgages were approved in June up 11% month on month and by 14% year on year.

Some 2,675 were for FTBs, mover purchasers accounted for 1,185, while switchers accounted for 1,789 approvals – an increase of 44% month on month and 153% year on year.

The mortgage approvals were valued at over 1.66 million in June.

On an annualised basis, the number of re-mortgage/switching loans more than doubled between June 2018 and June of this 2022 to 9,824.

Boosted by increased switching activity, the number of mortgage approvals in the 12-motnhs ending in June reached 55,467, the highest level recorded since the data series began in 2011.

Separately, a new survey from DaftMortgages.ie showed house hunters had 9% less spending power in the second quarter of this year compared to the same period last year.

The survey found house hunters have 304,000 euro on average to spend on a home; some 27,000 euro (or 9%) less spending power than 12-months previous.

It also found that on average mortgage seekers have 11,000 euro (15%) less savings to put towards a deposit compared to mortgage seekers in a similar position this time last year.

DaftMortgages.ie general manager Paul Monahan said it means single first-time buyers and home movers have reduced their expectations for the amount they will spend on a home.

Mr Monahan said: “It could be argued that the 15% reduced saving and therefore 9% reduced spending power for these house hunters may be a result of spending bouncing back as the Covid-19 pandemic restrictions lifted or could also be due to these customers feeling the pinch due to rising cost of living.”

The findings were based on analysis of over 170,000 people who submitted buying plans in preparing for a mortgage on daftmortgages.ie.