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Switching Your Mortgage

Thinking about switching ? Switching your mortgage can save you money each month and it is becoming easier to do since 2019, the Central Bank of Ireland put new measures in place to make it easier to switch your mortgage. Being one of the largest expenses of a persons life, switching your mortgage every few years can reduce your interest rate significantly which reduces your monthly repayments. If you think about it, you shop around for the best deals on everything else.. Why not shop around for your largest expense. With a rise in ECB (European Central Bank) interest rates expected, now could be the best time for you to switch your mortgage to a lower fixed rate.

Irish lenders after the financial crash around 2008 enforced higher customer interest rates. After the introduction of international banks to the Irish market, switching your mortgage gave people a lower rate of interest to compete with the market, allowing more people to switch their mortgage.

Since 2003 over 150,000 people have switched their mortgage, according to the Banking & Payments Federation Ireland. These people fully recognized the opportunity as a way to becoming more financially secure by way of reducing their monthly mortgage repayment.

Did you know that switching your mortgage saves 3 in 5 people 1,000 or more within a year? Moreover 60% of switched mortgages are €10,000+ cheaper over the remaining term of the loan.*

*Source: Central Bank of Ireland Statistics 2022


Best time to Switch your Mortgage

You can switch your mortgage at any time, generally speaking it is better if your fixed term has already ended, But if you have a short period left on your fixed term, it is also advisable to switch while rates are still low.

The benefits of switching your mortgage vary depending on personal circumstances, but switching can help you –

  • Lower your repayments
  • Save €1000s in interest alone
  • Release equity in your home
  • Reduce your mortgage term and pay off your mortgage early

Switching your mortgage can be done completely online and over the phone, from the comfort of your living room. Our online switching application will give you a full range of options from all lenders and your case will be handled by our award winning Mortgage advisors. We will handle all the paperwork, get the lowest rates for you and the most favorable terms for your mortgage… Which will in turn save you a lot of time and money in mortgage repayments.

It is important to plan ahead as much as you can when switching your Mortgage. Give us a call or click below to book a consultation today !


Is Switching your Mortgage an option for you?

To see if switching your mortgage is possible for you, you need to first consider your current mortgage details:

  • How much is left on your current mortgage, what is the balance to be paid to your lender. Minimum switching acceptance amount by competitive lenders is usually €30,000 – €40,000.
  • Some lenders wont accept your switching proposal if there are only a few years remaining on the current mortgage usually 5 years is the minimum term remaining.
  • If in a negative equity situation this can make switching difficult. This is dependent on the lender. Their assessment will go on a case by case basis to ensure an accurate home equity value.
  • Having a fixed rate mortgage with a specific lender could mean that you are charged a penalty fee for switching your mortgage. This fee usually is not large and could amount to be far less than your overall savings.

Knowing these key factors will provide you with the complete criteria needed to switch your mortgage.


Steps to Switch your Mortgage

If you can follow the steps and can answer the questions below, you’re on track for being able to switch your mortgage.

  • Keep a record of your financial situation as of present
  • How much you still owe?
  • How long is the term?
  • What’s my current interest rate or what are your monthly repayments?
  • Look into all lenders and their benefits.
  • Paying off any legal fees
  • After approval from your lender a direct debit form will be needed to be filled out
Required Documentation
  • Proof of identity. Example : Copy of your passport.
  • Proof of address Example : Household bills over the last 3 months.
  • Proof of your income and evidence that you manage this income.
  • Provide information on the amount you save per month / yearly.
  • Employment status : Information on your current employment contract type (Permanent, Full-Time, Part-Time).

How Much Could I Save?

Example Calculation:

Read the example below to see just how much you can save by switching your mortgage..

Lets say your mortgage balance is €300,000 at a 3.5% interest rate.

Your monthly repayments cost roughly €1,502 per month for a 25 year period.

Your total cost i.e total amount including interest comes to €450,715.

Now you plan to switch to an interest rate of 2%.

Your monthly repayments after the switch will reduce the amounts to €1,272 per month.

Reducing your total including interest to €381,536.

Which is a total saving of €69,179 in un-necessarily paid interest!


Summary:

Here you can see that at the lower rate of interest with the new Mortgage, you can save €230 per month and over €69,000 over the period of 25 years.

Note that if you choose to keep the repayments the same, at the lower rate this will reduce your term by 4 years and 8 months which will give you additional savings €16,349. With total savings in interest valuating at €85,528.

Note: Depending on your lender, switching your mortgage you could also receive a cashback lump from the new lender contributing to any legal fees. Saving you even more!


Switching your mortgage today will help you save a lot more for the future!

Watch our online system in action below or click here to book your appointment with our award winning Mortgage advisors today.

Our simple mortgage switching online application.
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