Switching Mortgages: Save Money & Avoid Overpaying
- this information is based on data from rte.ie and expert opinions from doddl.ie and SYS Mortgages.
Mortgage Switching: A Summary – Victoria Sterling
This document summarizes key facts regarding mortgage switching in Ireland, based on the provided text.
Key Takeaways:
Switching mortgages can potentially save significant money.
A financial assessment is crucial before considering a switch.
Costs exist, but can frequently enough be offset by savings or cashback offers.
1. When to Consider Switching:
If your fixed rate is expiring.
If you believe you could secure a better rate elsewhere.
Only switch if it makes financial sense.
2. Information Needed for Assessment:
You need three key pieces of information to determine potential savings:
Approximate Home Value: Based on recent sales of similar properties in your area.
Current Mortgage Balance: The outstanding amount owed on your mortgage.
Building Energy Rating (BER): A rating of A or B may qualify you for ‘Green’ rates.
3. Factors Affecting Mortgage Rates:
Lenders tier rates based on:
Mortgage Value: “High value” mortgages (€250,000+) often have lower rates.
Loan-to-Value (LTV): Calculated as (Mortgage Balance / Home Value). Lower LTVs generally receive better rates.
Energy Rating: A or B BER ratings can unlock ‘Green’ rates.
4. Costs Associated with Switching:
| cost Type | Approximate Amount |
| —————- | —————— |
| Legal Fees | €1,500 |
| Valuation Fees | €180 |
| Breakage Fees | Variable |
Breakage fees can be offset by cashback offers.
A broker can estimate costs and advise on viability.
5. Cashback offers:
Currently, six Irish lenders offer cashback.
Cashback ranges from €1,500 to 2% of the mortgage amount.
Example: A €400,000 mortgage could yield €8,000 cashback.
6. Potential Savings:
Average Annual Savings: Up to €7,505 per year.
Average Mortgage Size: €346,842 (as of the data provided).
Switcher savings have doubled in the last five years.
Borrowers are now borrowing €112,000 more than previously.
7. Expert Quotes:
Martina Hennessy (doddl.ie): Emphasizes the importance of assessing financial benefit and understanding rate tiers based on home value, LTV, and BER.
* Sean Corbett (SYS Mortgages): Highlights legal and valuation fees,the potential for offsetting breakage fees with cashback,and the value of broker advice.
this information is based on data from rte.ie and expert opinions from doddl.ie and SYS Mortgages.
– victoriasterling