Your mortgage is more than likely your biggest financial commitment. You may have taken out your mortgage a few years ago and haven’t thought about it since, other than to make your monthly repayments. If this is the case, you may be paying more for your mortgage than you need to, especially if you are not on a tracker mortgage. Recent Central Bank Research confirmed this by suggesting at least one in five consumers could save by switching.
You can completely underestimate the difference 0.5% or 0.7% in the rate can make to the level of interest you will pay on a mortgage over a 20 to 30 year period. The reality is that it can save/cost you €000’s. In the example below we are illustrating the effect it can have on a typical mortgage of €200,000:
There are a number of steps in considering switching your mortgage:
- See if there is a better deal available than you currently have with your lender and then see what they can offer before you consider switching
- Are you eligible to switch your mortgage (there are criteria that need to be assessed – see below)
- Will you save by switching?
- What are the costs in switching and do the banks contribute towards these costs?
The main points to take into account for eligibility to switch are:
Your Loan-to-Value (LTV) ratio – how much you owe on your mortgage in relation to how much your house is worth. In general, borrowers with lower LTV ratios will qualify for lower mortgage rates than borrowers with higher LTV ratios.
The outstanding balance on your mortgage – If you have a small outstanding balance, you may find it difficult to switch. You also need to evaluate if switching a small mortgage is financially beneficial.
You have been making payments on the mortgage over the last 12 months.
You meet certain criteria – If your personal circumstances have changed since you first took out your mortgage, you may have difficulties switching.
The mortgage is not locked into a fixed rate contract with the current lender. If you break out of the fixed term you will have to pay a penalty. You should check how much this will be before deciding to switch.
Your credit rating. An Irish Credit Bureau (ICB) check will be done by the new institution. If you have taken out loans or credit cards since your first mortgage and have had problems repaying these, you may not be looked at favourably by the new lender.
If you’re on a cheap tracker mortgage, these deals may not be for you.
Our Mortgage Advisers are experts when it comes to dealing with mortgage lenders. After assessing your individual situation and advising you accordingly we will then professionally package your application so that it meets fully with the expectations of the proposed bank. We will liaise with the lender throughout the mortgage application to ensure all requirements are met and the mortgage is switched as promptly as possible. In addition we are flexible with regard to meeting times – you don’t have to take time off work, as you would with a main street bank. We will meet you at a time and location of your choosing, including up to 9pm Monday to Friday.
Call and speak to one of our consultants today