A Note on the Size Distribution of Irish Mortgages

Abstract

Using Department of Environment data on number of mortgages by size category we find that the Weibull distribution accurately models the distribution of loans under €300,000 but severely underestimates the number of larger loans. We therefore use a a Pareto distribution for loans above this level. We estimate that from 2006 to 2008 there were fewer than 2,000 loans over €1 million with total value of €3 billion; and that there were 11,000 loans over €500,000 with estimated value of €9 billion. While the number of people taking out these mortgages is unknown, the conjecture that the largest 10,000 mortgage borrowers owe around €10 billion, largely for buy to let mortgages, does not appear implausible given these results. More tentatively, an ecological inference procedure suggests that interest only mortgages went almost exclusively to property investors.