Mortgage refinancing – from whom to whom?

A diverse set of entity types operate in the Irish mortgage market. We explore the role of these various bank and non-bank entities in mortgage refinancing patterns from 2017, looking at both from whom mortgage borrowers switch, and to whom they switch, using rich credit registry data. Looking at where borrowers switch to, we show that non-bank lenders are a particularly cyclical, interest-rate-sensitive source of financing, consistently increasing their share of mortgage switchers from 2019 to the turning point of the interest rate cycle in mid-2022, followed by a collapse in switching market share in late 2022 and 2023. On the question of from whom mortgage switchers originate, we highlight that mortgage customers at non-lending non-bank firms had a structurally lower propensity to switch than customers of banks over the period 2017 to 2023. However, higher-credit quality portfolios at these servicers have had similar rates of switching to those at retail banks, while those with higher credit risk are the groups that have had lowest propensity to switch.