With the New Year finally here, now's the perfect time to reassess all your financial outgoings to see what you could save. And what better way to save some serious money than on your mortgage!
We’re obviously a big fan of switching here at bonkers.ie but particularly when it comes to mortgages as the savings over the lifetime of the loan can be huge!
We’ve taken a look at all the mortgage lenders in Ireland to find out who's offering the best rates and what you could save by switching.
All our comparisons are based on someone who’s looking to switch a loan of €250,000, being repaid over 25 years, who’s currently on a variable rate of 4.5%, and has between 60% and 80% equity in their home. Your potential savings could be more, or less, depending on the rate you’re actually paying and how much you're looking to switch, but it’ll give you a good idea of what you could save.
If you have more than 40% equity in your home you may also be able to avail of even lower rates than the ones outlined below.
Which banks offer the best mortgage rates?
Let’s first look at fixed rates, which currently offer the best value for mortgage customers.
Across all banks and time periods, the best fixed rate on offer at the moment for those looking to switch is the 2.20% fixed rate over three or five years from Avant Money, which works out at a repayment of €1,084.15 a month. So if you’re currently on a standard variable rate of 4.50% that works out at a saving of €305.43 a month or a saving of just over €18,325 over the five years.
Second best is Ulster Bank which is offering a 2.25% fixed rate over two years. This works out at a monthly repayment of €1,090.33 or a saving of just under €300 a month. What's more, Ulster Bank will give you €1,500 cashback for switching to help towards your legal fees.
If you’d prefer the flexibility of a variable rate, the best rate on offer is 2.95% from both AIB and Haven. This equates to a monthly repayment of €1,179.04 or a saving of €210.54 each month. AIB will also give you €2,000 cashback and if you pay your mortgage back from an AIB current account you'll get free everyday banking.
|Bank||Rate||Monthly repayment on a €250,000 mortgage||Potential monthly saving*|
|Avant Money||2.20% fixed over 3 or 5 years||€1,084.15||€305.43|
|Ulster Bank||2.25% fixed over 2 years||€1,090.33||€299.25|
|KBC**||2.30% fixed over 2 or 3 years||€1,096.53||€293.05|
|Finance Ireland||2.40% fixed over 3 years||€1,108.99||€280.59|
|ICS Mortgages||2.45% fixed over 5 years||€1,115.26||€274.32|
|EBS||2.90% fixed over 5 years||€1,172.57||€217.01|
|AIB, Haven||2.95% variable||€1,179.04||€210.54|
*Based on someone who’s currently on a 4.5% variable rate, with €250,000 and 25 years remaining, and an LTV of at least 80%.
**Must have or open a current account with the bank to avail of this rate.
There will be costs associated with switching your lender. This will mainly be in the form of a solicitor's fee as well as a property valuation fee.
The good news is that many lenders are offering cashback of up to 3% of your mortgage to help towards (or in some cases more than offset) these costs. See here for who's offering what to switchers.
As a general rule though, regardless of whether your new lender is offering you cashback, if you're paying a rate of 3.5% or more on your mortgage, you'd be crazy not to switch.
Should I switch mortgage provider?
In recent times Irish mortgage holders have been reluctant to switch mortgage provider but as you can see the potential savings for those who do switch can be huge.
Many lenders also have dedicated switch teams in place to make the process as easy as possible so it often won’t be as much hassle as you think. And while there are costs associated with switching mortgage provider, in some cases banks will provide cashback to those who switch or a contribution towards the legal fees.
However, a word of caution. If you’re currently on a fixed rate you’ll need to wait until the end of the fixed rate period before you can switch mortgage provider, otherwise you could be charged a breakage fee. And if you’re lucky enough to be on a tracker mortgage, the chances are you’re already on the lowest rate available so there would be no point in switching.
To see exactly how much you could save by switching, check out our handy mortgage calculator.