Switching Mortgage in Ireland : How Much Can You Save?

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’re not on 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.
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 3.5% 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.

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). Of those – about 182,000 could be eligible for switching (Balance more than 30k and on a variable rate or less than 12 months left on a fixed rate)

There were just 7,267 switcher mortgages approved in Ireland in the twelve months ending December 2021.(ref)
That works out as only 4% of eligible Irish mortgages getting switched last year.

If you want some help with switching 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 give some calculations that show how switching a €300k mortgage could result in savings of almost €10000 over 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 €330,000 5 years ago.  (Term now remaining 20 years).
  • The property is now worth €460K and the outstanding balance is just €260k (LTV = 57%)
  • Their current mortgage rate (variable) is 3.7%
  • Repayments are currently €1534 a month.
  • Total repayments over the next 3 years on the current mortgage will come to  €55,224
  • After 3  more years of continuing with this mortgage, the outstanding balance on the mortgage will be €232,000

We have compared some of the options for switching mortgage providers by calculating the savings made over a 3 year period.

Important Note: These comparisons assume that the current payer’s variable rate will stay the same for the next 3 years.

Example 1 – Switch to Haven Cashback – Save €6481 over 3 years

Switching to Haven at 3.35% for 3 years fixed with €5000 cashback.

  • A new 20 year mortgage of €260k will pay off the old mortgage in full.
  • The new repayments will be €1488 a month.
  • Total repayments of €53,568 over the next 3 years That is a reduction in repayments of €1656 over 3 years.
  • The balance remaining after 3 years will be €231,175  – which is €825 less than it would be by continuing with the current mortgage
  • Haven give a cashback of €5000 on all new fixed rate mortgages over €250k
  • Switching fees of €1000
  • Overall Result with Haven after 3 years:  Better off by €6481
    ( €1656 + €825 + €5000 – €1000)

Example 2 : Switch to Avant Money – Save €9.7k over 3 years.

Switch to a 3 year fixed rate 2.25 from Avant Money

  • At 2.25%, a €260k mortgage over 20 years will have repayments of €1346 a month.
  • This is a total of €48,456  over 3 years which is a saving of €6768 compared to the current 3.7% mortgage.
  • The balance remaining on the mortgage after 3 years will be €228,037  – which is €3963 less than it would be with the current mortgage. 
  • Switching fees €1000
  • Overall Result after 3 years:
    • They will be €9,731 better off after 3 years by switching to Avant compared with staying on their current mortgage.

Some of the lowest mortgage rates are only available through brokers – for example, mortgages from Avant, Haven and Finance Ireland can only be obtained through a broker.
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.)

switch mortgages

Multiple Switches :

It is 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 the cashback.
More details here on Switching Mortgage for Cashback

Figures updated November 2022 –

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