New data submitted to the Financial Regulator for its next quarterly report on mortgage arrears and repossessions will show that more homeowners are falling behind on their loan payments, while a growing number are choosing to give up their homes rather than face foreclosure, financial sources said.

One mortgage broker source said abandonments would go up quickly because as many as one in five first-time buyers in the final years of the bubble were foreign nationals.

The data, which are collated from all regulated mortgage lenders, reveal that late payments and defaults continued to increase at the end of last year, with a sharp uptick in voluntary surrender and abandonment of homes, the sources said.

A spokeswoman for the regulator said the final data for the fourth quarter of 2009 were due last Friday, but that no analysis had been carried out yet on the information. She said the next scheduled publication for statistics on residential arrears and repossession was in March.

The news comes as mortgage lenders are widely expected to follow Permanent TSB and raise rates on standard variable loans to improve their margins, which are under severe pressure from high funding costs. Last Friday Permanent TSB confirmed it would increase rates by 0.5% from Monday, adding to another 0.5% increase it imposed last August.

EBS is expected to go next, with AIB and Bank of Ireland following soon after. Irish Mortgage Brokers predicted earlier this month that rates on average would go up by 1% in 2010 and another 0.5% in 2011 – irrespective of ECB rate moves – as banks seek to claw back some of their funding costs.

Some sources said these moves would fall disproportionately on those least able to pay, potentially causing further loan impairments, losses and repossessions.

"The least financially stable are going to be hit the hardest since they are the ones on standard variable rates," said one former chief executive of a home loans company. "Those customers who could demand trackers got them."

Statistics to September 2009 published just before Christmas showed more than 26,000 mortgages were in arrears by 90 days or more, with the majority of them – nearly 18,000 – half a year behind on payments. Voluntary surrenders and abandonments accounted for about three-quarters of all repossessions.