Thousands of euro in cashback are on the table for those who are prepared to switch lender.
Banks have been falling over themselves in recent times to encourage people to switch their mortgage and many now offer sizeable cashback incentives to those who make the move.
And with your mortgage likely to be your largest monthly outgoing for many years, it’s one bill you really don’t want to be overpaying on.
But first a quick run through on what you need to know before switching mortgage.
What you need to know
To switch mortgage you need to know three things: the amount outstanding on your mortgage, the number of years remaining on your term, and the interest rate you’re currently paying. All of this can be found on a recent mortgage statement.
You'll also need a good estimate of how much your home is currently worth.
Once you have this information, go to our easy-to-use mortgage calculator, input your details, and see what you can save by switching.
Who can switch mortgage?
Each bank has its own set of criteria for mortgage switchers and if your financial circumstances have changed for the worse since you qualified for your initial mortgage, you may have problems switching.
In general you also need to have around at least €30,000 or €40,000 remaining on your mortgage before a lender will consider your application. You also can’t switch if you're in negative equity. And ideally you should have at least 20%.
So, now we know the basics about mortgage switching, let's see what all the main banks are offering in cash right now to those who are prepared to make the move.
AIB is offering a flat €2,000 to switchers regardless of the size of the mortgage. However, as mentioned above, a minimum mortgage amount of around €40,000 will be required.
AIB says the €2,000 cashback will be paid into your nominated account within two months.
In addition, if you have an AIB current account, you’ll get fee-free day-to-day banking if you pay your AIB mortgage by Direct Debit from the account, meaning you can save even more.
BOI is offering one of the most competitive cashback deals on the market right now. It’ll give you 2% of your mortgage back in cash within a few weeks of switching your mortgage. And if you’re an existing Bank of Ireland current account customer it'll also give you an additional 1% in five years’ time.
So let’s say you’ve €200,000 remaining on your mortgage and decide to switch to BOI. You’ll get €4,000 in cash upfront and then another €2,000 in five years. That’s six grand in cash before taking into account the money you could also save each month on your repayments.
If you don’t have a BOI current account you can still get the 2% cashback offer - you just won’t get the extra 1%.
BOI also allows customers to avail of several flexible repayment options, subject to terms and conditions of course. These include taking a three-month payment break, being allowed overpay on your mortgage to save you interest (even if you’re on a fixed rate) and splitting your mortgage rate between a fixed rate and a variable rate. Not bad!
Like BOI, EBS is offering 2% cashback upfront to mortgage switchers and another 1% in five years’ time.
Unlike BOI, there’s no requirement to have or open any type of EBS current account to avail of the offer.
So, as in the previous example, switching a €200,000 mortgage to EBS could see you pocket €6,000 in cash after five years.
Next up is KBC, which is offering a flat €3,000 to switchers regardless of the size of the mortgage. The bank is also offering 25% off home insurance for the first year and has some of the lowest mortgage rates on offer right now for switchers.
KBC was also winner of the Best Mortgage for Switchers at the 2018 and 2019 bonkers.ie National Consumer Awards; so you know you're in good hands.
PTSB is offering 2% cashback to switchers. It also offers an additional 2% cashback on your mortgage repayment each month until 2027 if you pay your mortgage from PTSB’s Explore current account.
So if you switch a €200,000 mortgage you’ll get €4,000 cashback into your account within a few weeks of drawing down your mortgage and an additional €21.88 a month until 2027 (based on a three-year fixed rate of 2.85%)
Ulster Bank is currently offering all mortgage switchers €1,500 towards their legal fees so its cashback offer isn’t quite as generous as the other banks. However, like KBC, it does have some of the lowest mortgage rates on offer right now. It also has an offer of up to 50% off your home insurance in year one.
Are cashback deals good value?
While the lure of a few grand in cash might seem extremely tempting, you should always consider the overall cost of the mortgage when switching. Also, some of the lowest rates on offer are from lenders who offer no cashback at all. Check out our other article where we delve into the pros and cons of cashback deals.
Thinking of switching?
The easiest money you'll ever earn is the money that you've saved as they say. And who wouldn't like some extra hard earned cash in their pocket?
Head over to our free mortgage calculator where you can easily compare all rates and cashback deals across all lenders in just minutes and start your switch today.