Switching your Mortgage in Ireland
Many lenders in Ireland are still offering incentives to attract mortgage switchers – such as cashback – but how much can you save by switching your mortgage ? Is it worth it? YES IT IS.
Switching mortgage is the biggest single thing that people can do to reduce their outgoings. If you are on a variable rate or even a tracker mortgage, switching it will almost certainly save you more money than anything else you can do such as switching electricity or your current account.
There are still thousands of people in Ireland who could switch- but don’t even consider switching mortgage providers.
If they realised the amount of money that can be saved – they would be crazy not to consider a mortgage switch.
If your current mortgage rate is over 4% we say it is worth switching if you can.
Mortgage rates are on the way up again as the ECB increase their interest rates – so act fast to get the best rates now. The ECB rate that is used to set tracker mortgages increased to 4.25% in August.
Many tracker mortgages that have been at great rates for several years , have gone up from around 1% to around 4% since 2022. For many years, it made sense to keep hold of a tracker mortgage – but that may no longer be the case – and switching to a lower fixed rate could save homeowners thousands.
Mortgage switching is on the increase in Ireland but it is still relatively low. There were around 728,000 mortgages in Ireland according to the Central Bank (March 2021). But there were just 7,267 switcher mortgages approved in Ireland in the twelve months ending December 2021.
If you want help to switch your mortgage – you can use Money Sherpa. Visit their website and arrange a free no-obligation call back to discuss your switching options here.
Below – we show calculations that demonstrate how switching a €300k mortgage could result in savings of almost €2000 over just 3 years.
Larger mortgages will result in even bigger savings.
Switching Mortgage: Calculation of Savings :
- A homeowner took out a 25-year €300k mortgage on a house costing €345,000 5 years ago. (Term now remaining 20 years).
- The property is now worth €460K and the outstanding balance is just €262k (LTV = 57%)
- Their current mortgage rate is 4.2%
- Repayments are currently €1615 a month.
- Total repayments over the next 3 years on the current mortgage will come to €58,146
- After 3 more years of continuing with this mortgage, the outstanding balance on the mortgage will be €235,250
We have calculated the savings that could be made over a 3 year period., from switching to a lower rate.
Important Note: This comparison assumes that the current payer’s variable rate will stay the same for the next 3 years .(Which they might not, the rate may rise or fall.)
Example : Switch to Avant – Save €1926 over 3 years.
Switch to a 3-year fixed rate of 3.85% from Avant Money
- At 3.85%, a €260k mortgage over 20 years will have repayments of €1567 a month.
- This is a total of €56,412 over 3 years, saving €1734 compared to the current 4.2% mortgage.
- The balance remaining on the mortgage after 3 years will be €234,328 – which is €1192 less than it would be with the current mortgage.
- Switching fees cost an average of €1000
- Overall Result after 3 years:
- They will be €1926 better off after 3 years by switching to 3.85% with Avant compared with staying on their current 4.2% mortgage.
Some of the lowest mortgage rates are only available through brokers – for example, mortgages from Avant and Haven.
You can access lower-rate mortgages from these lenders through Money Sherpa. Visit their website and arrange a free no-obligation call back to discuss your switching options.
( DFP mortgages, trading as Moneysherpa is regulated by the Central Bank of Ireland.)
Multiple Switches :
It can be possible to do multiple switches one after another to several of the banks offering cashback.
On a 250k mortgage, it could be possible to “earn” in the region of €10,000 in cashback from doing just 3 switches. (After legal fees) .
The banks do not ask you to repay the cashback – even if you switch away from them a week after getting it.
More details here on Switching Mortgage for Cashback
Figures updated Sept 2023 –
Check out this page for details of the current Lowest Mortgage Rates
See here for the Best Interest Rates on Savings