Switch Mortgage

If the outstanding amount on your mortgage is less than €30,000, Irish lenders are unlikely to allow you to switch.

You must pass an assessment and qualify for your new mortgage, if your financial circumstances have changed, you will be assessed differently than your initial application.

You must have a good credit rating. A credit check will be carried out by the lender you choose to switch to. If you’ve had any difficulties on paying new loans or credit cards, this may make it difficult to switch mortgage.

You cannot be in negative equity. This will be assessed on a case to case basis when switching.

To switch your mortgage to another lender, you don’t need to have a deposit.

With a fixed rate mortgage, your interest rate and monthly repayments are fixed for a set time as agreed between you and the lender.

Variable rates allow you to increase your re-payments, you can also use a lump sum to pay off all or part of your mortgage, or re-mortgage without having to pay any fixed rate breaking fees. However, variable rates can rise and fall meaning your mortgage repayments can go up or down during your Mortgage term.

If you want to switch mortgage and your fixed rate hasn’t ended yet, you may be charged a penalty fee for switching. Some people choose to wait until their fixed term has ended, but the fee that’s charged is usually much less than the possible savings.

With interest rates currently rising, by the time your fixed term ends – you might not get as good of a deal when you want to switch. Overall this makes it more worthwhile to switch now.

This is a percentage figure which represents the difference between your mortgage loan and the value of your property. For example if your mortgage is €100,000 on a property valued at €200,000, your LTV rate would be 50%.

LTI is your Loan to Income rate, generally you are allowed to borrow 3.5x your annual income before tax. Some exceptions may apply.

This is the amount you owe excluding costs and interest. This is also known as the “Principal” of your loan.

This is when you are given an indication of approval from our first discussion with you, without having to see any documentation. This is not guaranteed approval.

The date the mortgage must be repaid in full, or by which a new agreement needs to be taken out.

There is no real ‘best time to switch’. Certain factors can slow down the process with lenders, such as how busy they are (Earlier in the year is usually faster). Also if your mortgage is more than 3.5x your salary, you will need an exemption (Central Bank) – In this case the earlier the better as there’s more excemptions available.

When considering switching Mortgage, December can be a particularly slow month as banks operate on reduced hours due to christmas. This makes January quite busy and can tend to slow things down.

This is a little bit of “how long is a piece of string?”. It depends on many factors such as your application, the lender and their requirements, solicitors. but in general around 6 weeks is an accurate estimate.

Since 2019, the Central bank of Ireland introduced new measures to make mortgage switching easier.

They introduced new measures that lenders have to now follow.

These measures mean that lenders must:

• Tell you about cheaper mortgage options 60 days before you come out of a fixed rate mortgage
• Tell you if you can switch to a cheaper mortgage based on how much equity is in your home
• Clearly explain the pros and cons of any mortgage incentives such as cashback offers
• Give you a comparison of how much your mortgage costs versus other options offered by your lender if you ask for one
• Give you all the information you need to switch, including telling you how long it will take
• Give you a decision within ten business days of receiving a completed mortgage application

Source – Central Bank of Ireland