Almost six out of 10 mortgage defaulters paying down debt

The amount of defaulted mortgage debt being paid back to lenders has been on the rise but repayment levels could be showing signs of flattening out, according to Ascent.

In its latest Domestic Arrears Report, the field agency business reveals that 57.2 per cent of homeowners so far this year promised to pay back at least some of their defaulted debt to lenders. This compares to 49.8 per cent during the whole of 2011 and 37.5 per cent in 2009 when the study of 27,000 people in debt counselling was launched.

Niall Gilhooley, chief executive at Ascent, said: “These latest figures paint an extremely positive picture overall and illustrate that despite very tough economic conditions, homeowners are fighting hard to retain their home and are willing to work closely with their lenders in order to ensure this happens.”

In addition to an increase in the number of people paying back at least a proportion of their mortgage arrears, there has also been a significant rise in the proportion of homeowners paying off all their outstanding defaulted debt. In 2009, just 1 per cent paid back all the debt they owed but in the most recent quarter, the figure stood at 4.1 per cent - the highest number since the study began.

Out of all the households who had fallen behind with their mortgage, 70 per cent accepted debt counselling. A year ago it was 68 per cent and four years ago it was 52 per cent.