A sharp drop in the average size of remortgage loans from peak values in early 2008 indicates borrowers are running out of options for refinancing short-term consumer debt with home equity.

Quarterly mortgage figures released by the Irish Banking Federation (IBF) last week showed the average value of a remortgage – or switcher – loan fell from €267,000 in the first quarter of 2008 to about €190,000 in the third quarter of this year – a decline of 30%. First-time buyer and mover purchase home loans fell by just 15% and 11% respectively over the same period.

Finance sources said the collapse in house prices was making remortgages, priced off loan-to-value ratios, not only smaller but harder to obtain. The change was also making it more difficult for borrowers to leverage equity to pay off unsecured debt, such as credit cards, personal loans and overdrafts, when switching lenders.

Banks have been tightening lending criteria across the product range as market observers have warned about a "second wave" of loan impairments as consumer debts go bad.

Meanwhile, the IBF has confirmed that Ulster Bank's head of capital markets, Robert Gallagher, has replaced Mike Ryan as president of the federation. Gallagher was due to take up the post next year at the end of Ryan's two-year term. However last month Ryan became deputy financial regulator of Qatar, prompting Gallagher to step in as acting president.