What if you just didn’t pay your mortgage?

Repossession is a dirty word in Ireland... but the reluctance to deal with homes in arrears could be costing households €250 a month

Most mortgage holders would be horrified at the thought of missing a monthly home loan payment. And we all live in fear of what multiple missed payments might mean – the horrors of repossession. But the reality is that you can get away without paying your mortgage for quite a while. A recent court case highlighted how restaurateur Ronan Ryan made no payments for over eight years on a €1.1m mortgage for a plush home in Clontarf.

Ryan is not alone in getting more than a bit behind with his mortgage.

A graphic produced by the Central Bank shows mortgage arrears since 2012. Long-term arrears of more than two years have grown while every other term of arrears shrank as the economy picked up.

So why is this happening? And what does it mean to borrowers who don’t pay their mortgage – and those who do?

Financial commentators seem starkly divided on the issue, as illustrated by our two panels below.

Brendan Burgess of Askaboutmoney.com claims that non-payers are adding to everyone else’s mortgage costs.

He calculates that we’re paying €250 a month more than we should.

And the chief culprit, he claims, is the fact that repossessions take up to 12 times longer to effect here.

It takes 18 to 72 months in Ireland – compared with just nine to 12 months in the UK and six months in Denmark.

Burgess, along with Karl Deeter and UCC economist Séamus Coffey, carried out a study in 2015 that showed 97% of almost 2,000 repossession cases that came before the courts were adjourned or struck out during their review.

Only 3% of cases – 52 in all – led to a repossession. Of these, 14 had clear family home status, while another nine were vacant, abandoned or seemingly rented out.

Burgess wants to see repossessions fasttracked to a six-month process – the same as in Denmark – but only for those borrowers who pay nothing at all off their mortgage.

Or else, he says, we will continue to pay the most expensive mortgages in Europe with little competition among lenders.

‘Do you think any bank in Europe would want to set up here when they’re reading about people not paying their mortgages for over eight years?’ he asks.

So who is right here? I don’t think anyone is in the wrong.

Ryan can hardly be blamed for doing the best he can for his family with the system we collectively put in place.

David Hall of the Irish Mortgage Holders Association and many others who work on behalf of troubled borrowers clearly have their interests at heart.

Messrs Burgess, Deeter and Coffey are number crunchers who have done a lot of unpaid work examining repossessions for what they see as the collective good of all mortgage holders.

They do an unpopular job revealing unpalatable truths that few others have the courage to address. And they get reviled on social media for their trouble.

The extent to which our very slow repossession system affects how much we pay for our mortgages is disputed.

But it stands to reason that it must have a considerable impact on the cost of mortgages in Ireland, which are among the most expensive in Europe. It’s also clear that overseas banks have no interest in coming here to boost competition.

And the few lenders we have seem likely to get even fewer.

However, no politician who wants to hold on to their Dáil seat is going to support measures to fast-track repossessions. It would be extremely unpopular.

It’s just not the way we are as a nation. Other countries like the UK and US are better at dealing with harsh financial realities and will swiftly punish the individual for the collective good.

Here, whether it’s because of the Famine, colonialism or sheer fecklessness, we always seem to favour the individual over the institution – even if it means paying an extra €250 every month for our mortgages.