Is now a good time to be thinking about switching mortgage?

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Southeast Mortgages & Financial Services | AIBF

The ECB are now raising rates (for the first time in over a decade) and we can expect more hikes in the months and years ahead.

This will be felt immediately in variable and tracker rates but even fixed-rate holders will feel it when their fixed terms end.

So we asked mortgage expert and Business All-Star Accredited Thought Leader Philip Cullen of Southeast Mortgages & Financial Services if now is a good time to be thinking about switching your mortgage provider.

Here are his thoughts…

The simple answer is yes and the sooner the better.

The rate hike signals the end of very low interest rates that began during the last crisis in 2008. The reason for the hike is inflation rates are very high and the ECB expect them to remain undesirably high for some time to come.

So what do you do?

Your mortgage is likely to be your biggest household outgoing, so this is one bill where you really don’t want to be paying more than you need to! So just like any other bill, you should look into switching every few years to ensure you’re getting the best available deal.

An increasing number of people are doing just that. According to the Banking & Payments Federation of Ireland, over 7,000 people in Ireland switched mortgage lender last year. A record high and a 22% increase compared to 2020.

So how much could you save?

A lot!

Someone who has a mortgage of €250,000 remaining over 20 years, who is currently paying a 4% interest rate and who has at least 20% equity in their home, could save around €250 a month by switching to the cheapest rate on the market.

That’s a lot of tax-free cash for your wallet!

And while there might be some upfront costs associated with switching mortgage provider, in many cases banks will provide cashback to those who switch or a contribution towards the legal fees.


Southeast Mortgages & Financial Services Founder Philip Cullen with his talented team.
Is switching mortgage an option for everyone?

Each bank has its own set of criteria for accepting mortgage switchers and if your financial circumstances have changed dramatically for the worst since you qualified for your initial mortgage, you may have problems switching.

However, if you look to switch mortgage and don’t get accepted, your current lender won’t treat you any differently. So there’s no need to worry if you get rejected. Nothing ventured, nothing gained as they say!

In general, before switching, you must consider factors such as:

The outstanding balance on your mortgage. Ask your lender for your current balance if you are not sure.

Whether you have a fixed-rate mortgage with your current lender. You may be charged a penalty fee for switching out of a fixed-rate mortgage early. However, lenders often waive this fee and sometimes the penalty may be far less than the savings you’d make by switching mortgage lender. Sometimes you’ll even end up with cash back so it’s important to do the math.

Your credit rating. You must still have a good credit rating. A credit check will be carried out by the lender you’re trying to switch to and if you’ve taken out new loans or used credit cards and had difficulties repaying these, you may have problems switching.

How much equity is in your home. You may have difficulty switching if you are in negative equity or have less than 20%. The more equity (value – Mortgage) you have the better the interest rate.

The term remaining on your mortgage. You may not be able or want to switch if you only have a few years remaining on your mortgage.

This article aims to give information, not advice. Always do your own research and/or seek out advice from a regulated financial broker, before acting on anything contained in this article.

Warning: Your home or property may be repossessed if you do not keep up repayments on your mortgage or any loan secured on it.

To learn more about Southeast Mortgages & Financial Services, visit their All-Star showcase page here.