The Central Bank of Ireland carried out Mortgage Switching Research and published a report in 2017 which highlighted findings with regard to people’s perception of and experience with regard to mortgage switching.
These misconceptions are common ground for customers that I speak to on a daily basis, and the break breaks them down to give you a better idea of the benefits of switching your mortgage – and doddl is here to help!
Consumers see mortgage switching as a significant undertaking
We get it, you have gone through the mortgage process previously, you had to wait patiently and in some cases anxiously for mortgage approval to come through to allow you purchase your home. You then had to fight off other bidders to buy your home and again wait to hear when you might be able to get your keys and move in. This can be a huge strain and lead to feelings of uncertainty and not being in control.
Mortgage switching is different, you are completely in control as switching your mortgage simply means moving it from one bank to another. This is a transaction, there should be no emotional rollercoaster as you already have your home, there should just be joy once the process is complete and you are saving money.
Oh and if we were looking for a possible feeling then that would be smug, smug in the knowledge you have switched and are no longer someone who is paying a high interest rate.
Consumers find it difficult to evaluate the difference between mortgage offerings present in the market
We totally understand and this is exactly the reason we created doddl. We wanted to offer a platform that could allow you to compare mortgage products, get access to expert advisors who can explain whether for example a fixed or a variable rate might be best for you, whether a cashback offer with slightly higher rate or lower rate excluding cashback makes more sense, whether there is flexibility with regard to overpayment on one banks fixed rate over another. And we can explain very simply what this means.
Our mortgage experts are not nurses or teachers or IT whiz kids like some of our customers, we are mortgage advisors, we understand mortgages, we understand what the banks have to offer you and our job is to find the product that best meets your requirements. Our job is to help you to save money on your mortgage so that when you are not in work doing the fantastic things that you do, you have money to spend on the things that you love to do.
Consumers see mortgage switching as costly
Currently the banks all have switcher packages which essentially are cash amounts that are lodged to your current account post draw down and which cover the legal and valuation costs of switching mortgage.
What are the lenders switcher packages? Currently these range from a value of €1,650, €2,000, €3,000, 2% cashback and up to 3% cashback depending on lender. When reviewing mortgage options or mortgage experts will outline lender rates and cashback options so you understand any cost benefit associated.
As such for a customer on a variable rate there should be no cost to switch based on average legal and valuation fee.
So what are the costs?
To use the doddl platform, zero.
Legal fee, you will need to engage a solicitor to carry out a certification of title. The work involved is less than that when you purchased the property and as such the fee charged generally reflects this. An average legal fee for mortgage switching would be €1,200.
Valuation fee, your new mortgage lender will require a valuation to be carried out on your home, the cost of this is up to €150.
Given that the switcher packages are cash into your account post mortgage draw down the costs are recouped from the lenders switcher package or cashback offer.
One thing consumers who are on a fixed rate will need to consider is if there is a break penalty to break out of the fixed rate. You can find this out by contacting your existing lender to ask if there is a break penalty to break out of your fixed rate. If there is then we can help you decide whether it is worth breaking out of the fixed rate based on the penalty versus any potential gain on lower rate.
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Any queries you have with regard to mortgage rates, mortgage switching, costs please do not hesitate to contact us, we would love to help and that is what we are here to do.