Best 3 Reasons To Switch Mortgage in Ireland

Did you know that you that switching your mortgage could save thousands on interest repayments and reduce your mortgage term? Top Mortgage explains.

Switching Mortgage
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    In January 2019, the Central Bank of Ireland put new measures in place to make mortgage switching easier. But estimates by the Association of Irish Mortgage Advisors (AIMA) show that eight out of ten homeowners are overpaying hundreds, or even thousands of euros on their mortgage every year because they haven’t looked at the benefits of switching mortgage.

    So why are we so reluctant to move our mortgage to a new lender? Well, it seems that many of us do not have the time nor inclination to research the market for a new lender with a lower mortgage interest rate, and as a result, we could be missing out on significant savings.

    But what many homeowners don’t seem to realise is that they do not have to do it themselves. You can switch your mortgage with the help of your local mortgage broker, who will do all the necessary research for you, and find you the best deal that could lower your monthly repayments, reduce your mortgage term, or in some instances, do both.

    Is Switching Mortgage in Ireland Worth The Hassle?

    Mortgage switching is not as complicated as Irish homeowners believe and, with the help of an experienced mortgage broker, you could save thousands in interest repayments or knock years off the term of your mortgage, and all with a simple switch of paperwork.

    To give you an example, on a €300,000 mortgage over 30 years with a monthly repayment of €1,500, you could save around €350 per month by switching to a 5-year fixed-rate mortgage with a new lender at an interest rate of 2.2%. Saving a massive €21,000 over five years.

    Alternatively, if you continued to make the same €1,500 monthly repayment, you could reduce your mortgage term by as much as 10-years, and save tens of thousands of euros in interest.

    So is mortgage switching worth the hassle? We’d have to give that a resounding YES!

    Three Reasons To Switch Your Mortgage Now

    Time is of the essence when it comes to mortgage switching in Ireland and, with the uncertainty surrounding Coronavirus, it is difficult to predict what the Central Bank of Ireland will do with interest rates in the coming months and years. If you want to get the best deal, you should switch your mortgage now, and here are the top three reasons why you shouldn’t delay:

    Low-Interest Rates

    Fixed-rate mortgages are at an all-time low in Ireland, and so the time to switch has never been better. Your mortgage broker will compare the market to find you the best deal based on the outstanding amount owed and the term of your mortgage, and provide you with impartial advice on choosing the right mortgage for your home.

    Cashback & Incentives

    With valuation and legal fees, switching mortgage costs on average €1,000, but with most mortgage lenders offering cashback and incentives, you can easily cover the cost of switching by choosing the right lender. Here is where your mortgage broker will make a real difference. Some banks are offering up to 3% cashback, along with other incentives such as deferred repayments, so your switching costs will be more than covered.

    Release Equity

    If you have equity in your home, you could release some of that when switching your mortgage for home improvements or repairs. Alternatively, you could potentially use this opportunity to consolidate other debts into one affordable monthly repayment. Speak to your mortgage broker for advice.

    While mortgage switching might not be suitable for everyone (if you have negative equity or impaired credit rating, for example), most Irish homeowners can benefit from switching their mortgage to a new lender. If your current interest rate is more than 3.5%, there is a good chance that you could save a considerable amount of money, reduce the term of your mortgage, or do both by making the switch.

    It’s easy to put things like this on the back-boiler and promise yourself that you’ll do it later, but the earlier you switch, the sooner you’ll start saving money.

    Switching mortgage has never been easier, and by employing the services of an unbiased mortgage broker with your best interests at heart, the only thing you’ll have to do is sign on the dotted line to start reaping the rewards of your new mortgage plan.

    Paul Quinlan

    Paul Quinlan

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    Last updated: 7th July 2020