Five tips for switching your mortgage provider and getting the best deal

Five tips for switching your mortgage provider and getting the best deal

Posted on 29Mar
The number of people switching their mortgage to avail of a better deal is soaring. The latest figures from Banking and Payments Federation Ireland found that there was a near 43% jump in people switching their mortgage over the last year. Given that making the switch could save you thousands of euro, Niamh Hennessy has compiled the top five tips to consider when switching your mortgage.
There are very strict criteria to be met when getting a mortgage and it is the same when it comes to switching.

Bite the bullet

You may still be traumatised about how hard it was to get your mortgage over the line in the first place that the idea of switching fills you with dread. However, it can be done and switching will not be as difficult as getting your first mortgage. Get into your mind that switching mortgage provider could save you thousands of euro and go for it. Generally it will take around eight weeks to complete a switch so try not to get frustrated and abandon the process if you feel it is taking too long. Joey Sheahan of said every mortgage holder should reassess their situation every three years regardless of what rate they are on.


There will be some costs involved in switching mortgage provider, mainly the cost of a solicitor. However the bill should not be as big as it was when you were first getting a mortgage. This can deter many people from switching but your mortgage is a marathon rather than a sprint and short-term pain can lead to long-term gain. Your solicitor too will do a lot of the background work on this. According to legal fees for switching can be up to €1,500 plus VAT.


Increased competition in the market means that switching is now easier and more cost-effective than ever.

Keep an eye out for deals. Banks make a lot of money from mortgages and they will want you to switch to them. Often banks will offer switchers lump sum payments, which is often around €2,000 or even cover the cost of your solicitor’s fees. According to Trevor Grant of Irish Mortgage Advisors increased competition in the market means that switching is now easier and more cost-effective than ever.

Watch the rate

Although a deal is great make sure you focus on the rate. You could be paying this mortgage for another 20 years and while a lump sum would be nice, the lower the interest rate is the less you will pay over time. Mr Sheehan points out that a borrower could save €70,000 in interest over the life of their mortgage by reducing their rate from 3.2% to 1.95%. There’s a lot of talk in the market too that interest rates could rise which would mean higher mortgage repayments. Mr Grant said that mortgage holders should be asking themselves how they might deal with any such future increases and now is a good time to switch if you can.

Not everyone can switch

There are very strict criteria to be met when getting a mortgage and it is the same when it comes to switching. If your financial circumstances have changed since you first got your mortgage it may not be as plain sailing as you think. A mortgage switching application will take into account your current financial circumstances. So, if for example you reduced your hours at work to three days instead of five days and have two additional children since you first took out your mortgage then the playing field will be different. That is not to say it wouldn’t be possible but it is something to bear in mind. Generally too you will not be able to switch if you are in negative equity on your mortgage. If you are on a fixed rate too you may need to wait until the term of that deal is finished.


Number of people switching their mortgage is highest on record

Posted on 27Oct

As inflation bites across the board, the number of people switching their mortgage is at the highest level on record, figures reveal.

Mortgages borrowing is at its highest level since the height of the boom 15 years ago.

But it comes amid a backdrop of thousands of hopeful homebuyers being squeezed out of the market by a dearth of properties for sale.

Millions of euro in lockdown savings are also adding fuel to property bidding wars.

A report on Tuesday from the Banking and Payments Federation of Ireland shows many have used lockdown to find better deals.

Switching activity grew strongly in September, with volumes up by 36.6% year on year and almost 7,000 switcher mortgages approved in the 12 months ending September 2021 – the highest annualised level on record.

But the booming figures don’t necessarily spell good news for prospective house buyers.

Housing campaigner David Hall, of the Irish Mortgage Holders Organisation, warned: ‘This is a very difficult environment for those seeking a home. It shows a continued strong performance; however, less than half those approved seem to draw down, indicating a severe lack of supply.’

He also called for more action to tackle property investors snapping up homes ahead of would-be first-time buyers.

‘It is essential some legal mechanism is found to exclude vultures from buying starter-homes,’ Mr Hall added.

A total of 11,479 new mortgages to the value of €2,784million were drawn down by borrowers during the third quarter of 2021.

This represents an increase of 40.9% in volume and 42.3% in value on the corresponding third quarter of 2020, when the country was in the middle of a lockdown.

First-time buyers remained the single largest segment by volume (52.7%) and by value (52.8%).

And their report also showed that total of 4,769 mortgages were approved in September 2021 – some 2,639 were for first-time buyers (55.3% of total volume) while mover purchasers accounted for 1,167 (24.5%).

Mortgages approved in September 2021 were valued at €1,205million – of which first-time buyers accounted for €668million (55.4%) and €336million by mover purchasers (27.9%).

BPFI chief Brian Hayes said: Almost 54,400 mortgages were approved in the 12 months ending September 2021, valued at almost €13.5billion, suggesting a strong pipeline for future demand as we move into the last quarter.’

Trevor Grant, chairperson of the Association of Irish Mortgage Advisors, said: ‘Ireland’s mortgage market is the busiest it has been in years. There’s no doubt that supply issues are making it difficult for prospective homebuyers, but healthy and intensifying competition between lenders mean first-time buyers and existing mortgage holders are in a strong position when it comes to securing good rates and terms.

‘While the volume of mortgage applications would traditionally slow down towards the end of the year, the feedback we’re getting from mortgage brokers across the country is that they do not expect the pace to slow to the extent that it usually would in December.”

Joey Sheahan, Head of Credit, and author of The Mortgage Coach, said: ‘Switching – or at the very least reviewing your mortgage – is something I cannot recommend strongly enough. Every single mortgage holder in the country (bar perhaps those on a tracker mortgage) should undergo a mortgage review every three years or so.

‘I think what precludes a lot of people is either a) they believe the process is complex and convoluted and/or b) they are on a fixed rate and so believe they can’t move. While the process itself does involve some form filling and document gathering, it’s nowhere near as daunting a task as taking out your first mortgage, and if you take the advice of a broker, they’ll do just about all of the leg work.

‘Also, those on fixed rates are not “stuck” with a lender until the end of their fixed term. In many cases, the breakage fee to exit a fixed rate early can be zero, depending on which lender you’re with, and how far away you are from the end of the fixed rate etcetera.

‘The savings could be huge – for example, a borrower could save €56,000 in interest over the life of their mortgage by reducing their rate from 2.95% to 1.95%. Based on €300,000 loan at 60% loan to value over 30 years.’

As the economy opens up and discretionary spending increases, Martina Hennessy, managing director of cautioned first-time mortgage applicants to manage their spending and continue to save regularly, even if they have already saved their full deposit.

‘Even if your income is strong and you’ve saved your deposit, your application will not be successful if you are not clearly demonstrating repayment capacity prior to application.

‘As a general rule of thumb, you should show evidence of €500 per month for every €100,000 you wish to borrow to show repayment capacity.’


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