AIB aim to lend €2 billion in mortgages in 2013

AIB announce €2 billion allocation for mortgage lending for 2013

Logo of Allied Irish Bank

One of Ireland’s pillar mortgage banks, Allied Irish Bank, announced its intention to double mortgage lending for 2013. Last year, the bank only planned to put aside a billion Euros for home loans, but heightened demand from first time buyers meant that approvals far exceeded the budgeted amount. Jim O’Keeffe, head of AIB’s mortgage division, said that €1.5 billion worth of loans were approved in 2012 for first time mortgage applicants with €1.2 billion of that being drawn down.

This year, AIB are putting aside €2 billion for new home loans, suggesting the bank’s confidence that demand will be sustained in the near future. And, it’s not just AIB who have found renewed confidence in mortgage lending. Indeed, its main lending rival, Bank of Ireland, recently said it would also allocate €2 billion for mortgage lending in 2013. Permanent TSB, who lent very little mortgages in 2012, has pledged to increase its lending funds to €350 million – five times more than what it put aside for mortgages last year.

2013 will prove to be a definitive year for mortgage lending, especially since the Mortgage Interest Relief (MIR) incentive is no longer available for first time buyers. It is unknown what effect the absence of MIR is going to have on mortgage demand in 2013. But, the willingness of the banks to place substantial funds aside for lending is an encouraging sign.