First-time buyers are now forking out over €1,300 more a year in mortgage costs than they were prior to the pandemic.

The stark increase is a result of increasing house prices and large loans, new figures have revealed.

Compared to the first half of 2020, mortgage repayments for first-time buyers (FTBs) are now €110 more expensive each month. Mover-purchasers are even worse off, paying €150 more a month, making their annual repayments €1,800 more expensive.

The figures, released by the Banking and Payments Federation Ireland (BPFI), show that the average monthly mortgage repayment for FTBs is now €1,020, while the average for mover-purchasers is €1,361.

BPFI head of sector research and analysis Anthony O'Brien said: "FTBs have traditionally sought longer loan terms than mover-purchasers, to maximise the loan they can get and to minimise the regular repayments over the term."

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The figures reflect mortgage drawdowns completed before the European Central Bank began increasing interest rates this year, which means repayments will have grown even more in the meantime. In July of this year, the ECB increased interest rates by 0.5 percentage points, followed by another 0.75-point increase in September, with yet another rate hike of 0.75 points coming into effect at the start of this month.

The first half of 2022 had the highest level of mortgage drawdowns since 2009, and it was a 17% increase on the same time in 2021. In the six months to the end of June, there were 21,895 mortgage drawdowns, with FTBs accounting for 11,178 of these - the highest number during the first half a year since 2007.

BPFI chief executive Brian Hayes said prospective home buyers have a number of options when it comes to trying to minimise their regular repayments.

"One way to reduce payments is to look for longer loan terms, particularly for FTBs as they are much younger than movers,' he said. 'Interestingly, however, there is no evidence of this, as latest data [shows] the share of FTB mortgages with loan terms of 35 years in H1 2022 was 26%, and this share has been stable between 22% and 28% since 2015."

He continued: "Another option to reduce payments is to maximise deposits in order to minimise the amount borrowed.

"In this context the report shows that between January 2020 and June 2022, almost one-fifth (17%) of FTB mortgages and nearly two-fifths (38%) of mover purchasers borrowed less than they could have under the Central Bank of Ireland loan-to-value and loan-to-income lending rules.

"These borrowers chose to contribute much larger deposits than they needed to under the limits.

"This analysis shows that the borrowing choices made by home buyers have significant implications. It is clear that borrowers are considering both how much they are permitted to borrow but how much they can afford to borrow and how they can minimise the costs."