When you purchased your home, it was very likely the biggest financial decision you have made in your life. It may have been a stressful time dealing with the various people in the process to secure your property, such as Estate Agents, Valuers, Solicitors and of course The Bank. The good news is now is a really excellent time to look at your interest rate and/or product selected to see is there better value now available.
Now that the dust has settled and to use the cliché, ‘you have turned your house into your home’, it is time to ask yourself an important question – What is the interest rate I am paying on my mortgage?
You may have got the best rate at the time of the mortgage drawdown, however over the last 12 months rates have significantly reduced and are much more competitive with many lenders competing on lower Fixed Rates in particular. More and more special features are now available such as over-pay even when on a fixed rate while most lenders are also offering cash incentives to switch mortgage provider. In addition, we have had a number of new residential lenders come into the market in the last few years
In summary, you now may be paying more money for your mortgage than you should be.
Incentives to switch
There are many incentives from the mortgage lenders to encourage clients to change providers: Some offer up to €3,000 towards costs and others offer Cashback up to 3% of the mortgage amount (T&C’s apply for Cashback Offers). However, the main driver should be choosing the most competitive rate with these lenders to off-set the costs involved.
Do I have to pay for a Valuation and Legal Fee’s?
When you are switching provider, your mortgage lender will need a mortgage valuation on your property which typically costs c€150 (this is normally instructed by the lender who you are changing to so no need to pay for a valuation upfront). There will also be legal fees as the new lender needs to have their security on the property. The legal costs do vary but c€1,500 on average should cover it to complete switching your mortgage to a different lender.
In recent years the Central Bank has encouraged existing borrowers to shop around and look for better value from their mortgage. Many of these borrowers may be on fixed rates and think they can only switch out of this rate at the end of the fixed rate period. We are seeing more and more situations where this is no longer the case with the cost of breaking the fixed rate small and recoverable through the lower alternative rates.
Your first step should be to find out from your current lender what the breakage cost is if you are on a fixed rate.
So, even with you paying the associated fees and costs, there could be significant savings to be made over the long term of the mortgage when you factor in the incentive offering the provider has but more importantly the lower rate you will be availing of.
How to switch my mortgage?
Irish Mortgage Corporation is one of the very few mortgage brokers who have access to all seven residential mortgage lenders currently operating in the Irish market. As a result, we provide impartial advice and have in-depth knowledge of each lender’s criteria. This enables us drill down to identify the most suitable product allowing for each client’s financial situation and the very best and most suitable interest rate product (fixed or variable). So, get in contact with us now and we will do the rest!