**Switching your Mortgage Provider – is it worth it?**

Back in the “Celtic Tiger” years most of the Irish banks were actively trying to get people to switch mortgages by offering lower rates and other incentives. In 2006 the mortgage switching market made up about 15% of all new mortgages in Ireland.

In 2006 about 10,000 people switched their mortgage to a new lender. By comparison – in 2014 , according to the Central Bank , **less than 500 people switched mortgage lender.
**

In 2016 – some of the banks in Ireland have again started offering incentives to attract switchers – but **how much can you save by switchin**g? Is it worth it? Mortgage brokers will usually try and push the idea of switching mortgages to try and get some business .

There are some costs involved in switching your mortgage – you will need a property valuation and there will be legal fees too. On average – you can expect these two costs to come to about **€1000. **Below we show some comparisons that show a drop in interest rate of just 0.8% on a €240k mortgage can result in possible savings of ** over €12000 over 5 years**.

**An example ; **A home owner owing 80% of the value of their house – i.e. a €240k mortgage on a €300k property. 80% LTV (Term remaining 20 years).

Current mortgage (variable rate ) is **4.25%** – and repayments are** €1486 a month.
**Total repayments over 5 years will come to

**€89,160**

After

**5 more years**of continuing with this mortgage the

**outstanding balance**on the mortgage will be

**€197,554**

We have compared some of the best options for switching mortgage provider by calculating the savings made over **a 5 year period.
Important Note : **Comparisons assume that any variable rates will stay the same for the 5 years. (They probably won’t)

**Switch to Bank of Ireland** at 3.45% for 5 years fixed.

Payments will be €1386 a month .Total repayments of €83,140 over 5 years That is a reduction of **€6020 .**

The balance remaining after 5 years will be €**194,510 – **which is **€3044** less than with the current mortgage

BOI also give cashback of 2% – which is €4800 on a €240,000 mortgage. Switching fees of €1000 to be deducted.

Overall Result with BOI after 5 years : Better off by €12,864

**Switch to PTSB** at 3.5% for 1 year then 4% .

Payments will be €1392 a month for the first year then €1451 a month for the next 4 years. Total repayments of €86,350 over 5 years That is a reduction of **€2810.**

The balance remaining after 5 years will be €**196,244 – **which is **€1310** less than with the current mortgage

PTSB also give cashback of 2% – which is €4800 on a €240,000 mortgage. Switching fees of €1000 to be deducted.

Overall Result with PTSB after 5 years : Better off by €7920

**Switch to Ulster Bank** Fixed rate for 5 years at **3.6% , ** plus €1500 cashback.

Payments will be €1404 a month for the five years – that’s total repayments of €84,255 over 5 years That is a reduction of **€4905**.

The balance remaining after 5 years will be €**195,090 – **which is **€2464** less than with the current mortgage

Ulster give **€1500** towards switching expenses which we are assuming will cost €1000 – so that’s another small gain of €500

Overall Result with Ulster Bank after 5 years : Better off by €7869

**Switch to EBS at 3.5% : **Payments will be €1392 a month – a total of €83,520 over 5 years which is a saving of €5640**.
**The balance remaining after 5 years will be €194,703 – which is €2851 less than with the current mortgage. Switching fees of €1000 to be deducted.

Overall Result with EBS after 5 years :

**Better off with EBS by €7491**

*Figures updated Feb 16th 2016 –*

Check out this page for details of the current ** Lowest Mortgage Rates**