The changes, first announced in June, follow research by the Central Bank back in 2015 which found over one fifth of borrowers could save money by switching their mortgage, yet few do so.
The new requirements on lenders will make it easier for mortgage customers to spot when they should switch lenders to get on a better rate and make sizeable savings on the remainder of their loans.
To make it easier for you to switch your mortgage, the Central Bank has introduced six new measures that lenders will now have to follow:
So, in a nutshell, these new changes should make it a whole lot easier for mortgage holders to be able to spot and understand if, and when, they should switch lenders throughout the course of their loan period. And if you do decide to switch, the process should be a little bit easier.
On the Central Bank's new requirements, Gráinne McEvoy, Director of Consumer Protection said:
"While information to help consumers compare mortgage rates is widely available, our research also shows that some of the reasons people don’t switch their mortgage is because they don’t realise how much money they could save and also find it difficult to compare mortgages. These changes are aimed at making it easier for consumers to obtain this key information so that they are able to easily identify whether they are able to make savings by switching their mortgage, and make the process quicker and easier to complete if they do decide to switch.”
Here at bonkers.ie, we pride ourselves on being a champion of the consumer and we’ve always been on a mission to save you money, which is why we wholeheartedly welcome these new changes from the Central Bank.
Commenting on the new changes, Daragh Cassidy, Head of Communications here at bonkers.ie says: “Although increasing, the level of switching in the Irish mortgage market remains chronically low at less than 1%. So anything which facilitates switching is to be hugely welcomed.
Quite often we find that customers don’t bother trying to switch mortgage as they feel the process is too cumbersome and because they don’t realise the potential savings involved. These changes to the Consumer Protection Code should help to address that.”
Outlining the savings to be made with switching, Daragh says: “Someone who has a mortgage of €250,000 and is paying a 4.3% standard variable rate could save over €250 a month, or over €3,000 a year, by switching to the cheapest rate on the market. And while there are some upfront costs associated with switching mortgage provider, in many cases banks will provide cashback to those who switch or a contribution towards the legal fees.
And while switching may not be an option for everyone, particularly for those who are in negative equity, I’d encourage anyone who’s been with their mortgage provider for a few years to review their options and see whether they could save by switching to a better deal.”
If you think you could make savings by switching your mortgage, you can compare interest rates and incentives across all the main lenders in Ireland with our handy Mortgage Calculator. Give it a try: it’s accurate, impartial, and free to use.
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