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Central Bank report finds mortgage holders could save over €10,000 by switching
Daragh Cassidy
Head Writer

Despite the big savings on offer, few are switching lender.

We always say here at that switching saves. And given how big most people’s mortgage is likely to be, switching this bill can really help you save.

And now a new report from the Central Bank has highlighted just how much mortgage holders could save by switching lender. 

How much could I save? 

According to the Central Bank, three in every five eligible mortgage holders stand to save over €1,000 within the first year alone if they switch mortgage provider, and more than €10,000 over the remaining term.

Those who switched ended up with an interest that was, on average, 1% lower than what they’d been paying.

However some people could save even more! 

For example, right now if you’re paying a mortgage rate of 4% and have €250,000 remaining on your mortgage, you could save just over €214 a month if you switched to KBC’s 2.30% fixed rate over three years. What’s more, KBC will pay you €3,000 cashback to entice you to switch. So that's over €5,500 in savings in the first year alone for switching.

To see how much you could save, just head over to our mortgage calculator and input your details. You’ll then see a list of all the rates on offer, how much you could save, as well as any cashback or other incentives. 

Can I switch? 

While the savings on the table are certainly eye watering, it’s important to note that not everyone will be able to switch. 

For example, most lenders will want to see that you have at least €30,000 remaining on your mortgage as well as five years. 

Also, if your financial circumstances have changed for the worse since you originally got your mortgage you may not be accepted by any lenders. 

Banks will also want to see that you have at least 10% equity in your home, though 20% or more would be ideal.

Also, those on tracker rates will generally be getting the best deal available anyway so switching for them would make no sense.

Finally, if you’re on a fixed rate you’ll usually be charged a breakage fee for leaving it early although those with less than 12 months remaining will be charged little, if anything, for breaking contract and so should not be deterred from switching.

Are many switching?

In short, no.

Even when you take account of the people on trackers or fixed rates or who don’t have enough equity in their homes, just 2.9% of eligible mortgage holders switched lender in the second half of 2019. This means thousands are missing out on big savings!

Why aren’t people switching?

A range of factors are given by the Central Bank for people not switching. 

  • They don’t realise how much money they could save
  • They find it difficult to compare mortgages
  • They believe the process is too long and complicated

Those with lower levels of financial literacy and education are also more likely to be put off switching.

Making switching easier 

The good news is that makes it quick and easy to compare mortgage rates. Our mortgage calculator lets you easily compare interest rates, offers and cashback incentives from all of Ireland’s mortgage lenders in just seconds and will quickly tell you what you could save by switching.

We can then put you in touch with a qualified mortgage advisor to help you progress with your switch. 

The Central Bank has also been doing its part too.

It recently brought in a mortgage switching code of practice to make the process easier. 

The main parts of the code mean lenders now 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

Learn more about switching

At our aim is to save you money by helping you make informed decisions. We’ve compiled a list of articles about switching mortgages that will help you.

So what are you waiting for? See how much you could save today!

Let's hear from you!

Have you considered switching your mortgage? If not, why? And what could be done to make the process easier do you think?

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