HOW TO SAVE €10,000s ON YOUR MORTGAGE - EXCLUSIVE by KIERAN DINEEN
HOME owners can save tens of thousands of euro by shopping around for a cheaper mortgage, the Irish Sun has found.
And people could bank €20,400 over the lifetime of an average mortgage by switching lenders, according to our price-comparison study.
The cash boost is even higher for people with bigger loans.
Those in negative equity — including many who bought during the boom — have no choice but to stay with their current bank.
But many of the householders who can switch don’t even bother trying.
The pick-up in the property sector has led to competition in the industry as lenders try to win new customers.
Bonkers.ie compared the prices on offer from lenders on a 20-year €200,000 mortgage, where the property is worth €250,000.
The study shows savings of €85 a month are on offer, which come to €1,020 a year or €20,400 over the lifetime of the loan.
This is enough to buy a 2015 Toyota Corolla.
The difference between the best and worst interest rates on offer is 0.81 per cent, which adds up to a lot of cash for savvy switchers.
KBC Bank offer the lowest variable interest rate of 3.69 per cent for people who also open a new current account with them.
“You may as well talk to the wall”
This works out at a monthly repayment of €1,180.
Ulster Bank have the highest variable interest rate of 4.5 per cent for new customers, or €1,265 a month, according to Bonkers.ie.
There are also savings available for people who choose to take up a fixed term rate.
The Bonkers.ie study showed KBC’s offer for new current-account holders leads the way again at 3.3 per cent which works out at repayments of €1,139 a month.
Mortgage Stores have the worst offer with an interest rate of 4.1 per cent, or €1,223 a month.
This means there is a difference of €84 a month, or €20,160 over the whole life-time of the mortgage.
And people with a €300,000 mortgage could save as much as €153 a month by switching lenders — or €36,722 over two decades.
One obstacle to moving lenders is the legal fees involved, but KBC even offers people €1,000 to switch which is enough to cover this cost.
Of the 750,000 mortgage holders in Ireland, 400,000 are on trackers so don’t need to move.
But many of the 350,000 other home-owners are in a position to switch, yet still are reluctant to do so.
Simon Moynihan of Bonkers.ie: “You may as well be talking to the wall than asking people to change mortgages.
“People will change only when they have to, such as when a bank pulls out of Ireland.
“Unfortunately, Irish people tend not to change. They open an account in their parents’ bank or one offering a student offer, and stick with it.
“You should be careful when making such a decision but there is nothing wrong with talking to other banks when you have a mortgage.
“Even a 0.25 per cent interest drop can save a lot of money over the lifetime of a mortgage.
“In the last few years charges have been introduced on current accounts, yet people
won’t switch even though they could get free banking somewhere else.
“This is the first time now in a long while that interest rates are going down and banks have money to lend.”