DUBLIN, Ireland–Ireland’s credit unions are on track to provide €150 million or more in mortgage financing this financial year, which would mark an 18-fold increase in mortgage activity over the past six years, according to a new report.
Credit unions using the Credit Union Development Association's (CUDA) Mortgage Support Platform - SAM - have already loaned out more than €70 million in the first half of the current financial year, which started on Oct 1., according to RTE.com.
“This figure is expected to easily surpass €150 million for the full year, up from €8.1 million in 2018,” RTE.com reported. “CUDA also said it believes that total new credit union mortgage lending could reach €1 billion a year by 2027.”
The report noted that figures reported by credit unions indicate that the average mortgage amount has increased by 70% since 2018, from €108,835 in 2018 to €185,474 in 2023 on an average property value of €341,700.
The average mortgage term has also increased from 18 years in 2018 to 23 years in 2023, while the average interest rate is 3.72%, the report said.
More Than Two-Dozen CUs Involved
More than 25 credit unions offer mortgages through the SAM mortgage platform and this number is consistently growing.
Kevin Johnson, CEO of CUDA, said the phenomenal growth in lending is driven by an increased appetite for credit union mortgages as well as the increased ability of credit unions to provide mortgages.
"The demand from members is clear, they want an alternative to the banks and credit unions are stepping up," CUDA CEO Kevin Johnson told RTE.com.
As CUToday.info has reported, the country’s regulators have for several years been encouraging credit unions to grow their lending.
New Law Makes Big Change
The average loan-to-share ratio at Ireland’s CUs has been less than 30%, due in large part to regulatory restrictions that have been changing.
In particular, a legislative change in February will allow credit unions to offer a service or product such as a home loan to a member of another credit union under a formal arrangement with that other credit union, in the last quarter of this year.
"This effectively means that every credit union in the country will be able to offer mortgages," Johnson said.
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