Positive signs of mortgage recovery as Bank of Ireland increases lending

Bank of Ireland has announced that it provided over €1bn in new mortgage funds drawn down by customers in 2012.

Almost 90pc of the €1bn in mortgage draw downs was to customers buying their first home or moving to a new home and around four in every 10 mortgages in 2012.

Last, the bank launched a new €2bn fund to support first time buyers and movers purchase a home during the remainder of 2012 and throughout 2013. According to the bank, it has received approximately €400m in applications.

Signs that property price drops may have begun to ease are some of the factors behind a rise in mortgage applications. According to Bank of Ireland, year-on-year new mortgage lending in the third quarter of 2012 was up 7pc.  This is the first quarter since Q4 2006 to deliver positive year-on-year growth.

The bank’s new mortgage lending in the second half of 2012 represented a 65pc increase on the value of mortgages advanced in the first half of the year.

Bank of Ireland has also released some insights into the profile of first time buyers who obtained their mortgage through the bank in 2012. In 2012, the average first time buyer mortgage was €153,000.

The average LTV (loan to value ratio) on a first time buyer mortgage in 2012 was 77pc, meaning the average first time buyer contributed a deposit of 23pc. The majority of first time buyers bought the property with someone else and the average age was 32.

Meanwhile, most bought in Dublin and the commuter counties.

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