Making Cents: Switch your mortgage to avail of great savings

 

 

Tuesday, December 05, 2017

For those of us not lucky enough to be on a tracker mortgage, there has been some good news in the last couple of month, with many of the main providers reducing either fixed or variable rates, writes Grainne McGuinness.

Bonkers.ie head of communications Mark Whelan, said recently: “There is finally some healthy competition entering the Irish mortgage market, which is good news.”

However, although variable rate customers will benefit immediately from any price increase from their own banks, many could still get better rates elsewhere. So what is the advice from experts? You guessed it, it is to switch. This is despite the fact that consumers are notoriously slow to switch providers, particularly for a complex product like a mortgage.

Joey Sheahan, head of credit with MyMortgages.ie promoted the positive benefits: “With the still curtailed new house building, banks are struggling to hit their mortgage
targets and so are turning to the switching market. This is creating an opportunity for many homeowners to make considerably savings.”

His company recently released figures which suggested that on ‘average’ mortgages throughout the country, anywhere between €40,000 and €100,000 could be saved by moving to another lender.

Mr Sheahan said people are struggling unnecessarily with repayments. “There are homeowners needlessly paying more than 3.6% in interest. A large portion of these people can easily switch lender once they have 10% equity in their property. There are less and less people in negative equity due to the unprecedented recovery in property values over the past few years.”

And yet, all the research and figures suggest that very few of us will switch. No matter how many experts advise us too, there is still a perception that the whole process is too difficult. So is it a lot of hassle? I asked Niall Daly, conveyancing partner with BDM Boylan Solicitors in Cork, for an honest assessment of switching and its popularity.

“We don’t see an awful lot of it,” he said. “There is some, but is not an avalanche. It would really want to make sense for someone, before they will consider it.” There are a number of potential issues he flags, although these will not affect all customers.

He says depending on the type you have, you may have to take out a new life policy, particularly if extending the term. If you have had any health issues since you took out your
original policy, you may run into problems if your insurer requires a fresh medical.

“It might not necessarily be a cost but it is one of those things you would want to be aware of,” he says.

One issue he is keen to highlight is the need to certify any work that has been done to the property.

“If the clients have extended or altered the house since they took out their first loan the solicitor should insist on getting an engineer to sign off on the work, and if it needed planning, check that they got planning,” he said.

Some solicitors will require that the local property tax is up-to-date on the property. There will also be a few hundred euro in charges relating to the deeds themselves. However, Mr Daly believes mortgage-holders should definitely review the loan, particularly if they originally took it out over a long term, 30 or 35 years.

“What I always say to clients is, if you can afford it, go back to your bank after a number of years and say you want to to reduce the term,” he said. “It will increase your monthly payments, so it does come down to affordability. But it will reduce what you pay in the long term. What people with very long terms are doing is taking short-term gain for long-term pain. You pay way more in the long run.”

While switching is a little more complex, he agrees it is something customers should consider as an option.

“Sit down with your calculator and make sure it is worth it. If the bank is paying the legal fees or giving cash back that will cover costs, that eases the pain. You can do it in less than a month if the customer is organised.”

 

Source: The Examiner 5/12/2017  http://www.irishexaminer.com/lifestyle/features/making-cents-switch-your-mortgage-to-avail-of-great-savings-463943.html

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601

MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland.


By Christian McCashin
Home owners can save almost a third of the value of their mortgage by simply switching to a cheaper deal. A bank mortgage price war means anyone on an average variable rate can save hundreds a month on even a relatively small home loan of €150,000.

Joey Sheahan, of MyMortgages.ie said: ‘Many people assume that once they’ve taken out a mortgage with a lender for 20, 25 or 30 years, then that’s the end of the decision-making process. But mortgages are just like any financial product, they should be reviewed every three years to ensure you are not paying over the odds.’
Figures show anyone on ‘average’ mortgage rates can save between €40,000 and €100,000 by moving to another lender.
Brokers are expecting a surge in mortgage switching over the next year as banks ramp up their interest rate price-war with more households back in positive equity – which means the house is worth more than the mortgage – because of the surge in the property prices.

Davis Hall, of the Irish Mortgage Holders’ Organisations, said: ‘As consumers we don’t switch, we just have an obsession about not switching. We don’t engage in anything that involved a bit of hard work… It doesn’t make any sense to look at the price of a litre of petrol on garage forecourts and not be looking at switching your mortgage.
‘You’re also helping to spice up the market and contributing to kicking the market and let the bank know they can ring you back if they want if they have a better deal.’
More than one in five mortgage holders – 21% – could make savings by switching their lender, the Central Bank found recently.

And a Competition and Consumer Protection Commission report on mortgage switching revealed that while over a fifth of the adult population in Ireland hold a mortgage, limited evidence was found of switching.
Fewer than 25,000 of 740,000 mortgage holders switched their home loan – just 3.3% – in Ireland in 2014, a study by the European Commission found. Almost half – 44% – of all mortgage – holders surveyed felt the switching process would be too complex, while 27% of those who switched found no obstacles to the process.
More than a third – 36%- of their mortgage reported that they had to chase their lender to be kept informed during the switching process.

And a quarter said they considered switching but did not because they felt it would take too much time and too much effort.

Mr Sheahan, of MyMortgages.ie , said ‘We deal with clients on a daily basis who are unaware that switching could even be an option for them – many believe that they are simply ‘locked in’ to the contact and their current lender. And of those who have heard of switching most think it is ‘just too much hassle.’
‘People have also voiced concerns over the cost of switching but they don’t realise that most banks give cashback which will more than cover this from €1,500 up to 2% of the loan amount.’

Source: The Daily Mail 24 Nov 2017

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601

MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland.


How Irish homeowners could save €3,600 a year by making mortgage switch – all your questions answered about making the move

According to MyMortgages.ie research, the ‘average’ borrower could save between €40,000 and €100,000 over the lifetime of their mortgage by moving to another lender

By Fiona Ellis   30 November 2017

According to the company’s research, the “average” borrower could save between €40,000 and €100,000 over the lifetime of their mortgage by moving to another lender.

Joey Sheahan, Head of Credit with MyMortgages.ie said: “A mortgage is most people’s biggest monthly expenditure and yet it’s something that people don’t pay enough attention to when it comes to getting the best value on the market.
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Looser Central Bank rules, generous Help to Buy grants for first-time buyers – but trader uppers are being left out in the cold


Property purchasers struggling to save more than a 10% deposit should remember that there are ways to get exempted from the rule.

Property search: figures from Myhome.ie indicate that the average national asking price is now €208,000. Photograph: Aidan Crawley/Bloomberg

 

Some 14 months on from the introduction of the oft-discussed and much-maligned mortgage lending rules, they certainly seem to be having an impact.

Mortgage approvals have slumped 15 per cent in the three months to the end of February, compared with the same period a year earlier. However, industry players say this is not down to the rules alone. Approvals rocketed ahead of their introduction, so looking year-on-year may not be a fair comparison.

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MORTGAGE brokers MyMortgages.ie have said that despite the Central Banks recent efforts to highlight the benefits of mortgage switching to consumers, the majority holders remain unaware of the potential savings that exist and of their eligibility to switch lenders.

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