Irish Life & Permanent, Ireland’s biggest mortgage lender, said loan losses for the three years to 2011 will be toward the top end of its forecast, as borrowers struggle to make repayments amid a deteriorating economy.

The impairment provision will be about 1.6% of total loans over the period, the Dublin-based company said in a statement today. In March, Irish Life said the provision for souring loans would be between 1% and 1.6%.

Irish Life said arrears in Ireland rose to 2.6% at the end of March from 2% at the end of December as Ireland’s economy encounters its worst-ever recession. First quarter arrears in the UK rose to 4.2% from 3% in December.