More people are switching their mortgage in Ireland, this is evidenced in the number and value of transactions 2017 to 2018 which resulted in year on year growth of 75%.
Why are more people switching mortgages?
In general people switch their mortgage to avail of better mortgage interest rates which allows them to reduce repayments or reduce their mortgage term. People also switch their mortgage to release equity to allow them to carry out home improvements, to fund education costs, medical expenses etc.
In my experience, the most common reason that people switch their mortgage is very simply, to save money on their largest financial commitment. Mortgage holders can save money by switching their mortgage to another mortgage lender and securing a lower interest rate. It is very important here to be guided by an expert when looking at what rate on market best meets your requirements and situation. It can be easy to be dazzled by low rates and cashback offers but what really is the best option for you? That’s where we come in.
At doddl our mission is to provide you with a range of mortgage options that are open to you and to discuss and evaluate them to establish the mortgage offer that is the best fit for you and your personal circumstances.
Why have Irish consumers been slow to start regularly switching their mortgage?
Research would show that this has a lot to do with apathy, people know they can save money by moving mortgage but just don’t know where to start…
We know life is busy and once you have been through the mortgage process to purchase your home you may feel that its too difficult to go through it again. But switching is not the same process as buying. At doddl, we want to help people understand that the gain is certainly worth any perceived pain. We understand that when taking out your mortgage initially there is a lot of emotion, you are hoping to get the mortgage you need to be able to purchase the property type you want, you go through a bidding process and your nerves are shot hoping to get the house you want, you anxiously wait until you have keys in hand and you breathe and start enjoying your new home.
Then we come along and ask you to switch mortgage and you think, do I really have to go through that again? The answer is no, you absolutely don’t. The mortgage switching process is different, it is purely a transaction that moves your mortgage from one lender to another so as to save you money on interest, to allow you to release equity or to reduce your mortgage term. You still have the same home, you are moving mortgage simply to reduce the level of interest you pay on your mortgage or to get better mortgage terms.
We all work too hard to earn money to then continue to pay more in mortgage interest just because you feel its too much hassle to revisit your mortgage terms.
So what do you have to do to switch your mortgage?
Firstly you need to see if you can switch and if you can save. Our mortgage savings calculator will answer part of this question but there is nothing like speaking to an expert. Our dedicated mortgage switching team are expert advisors who will be able to discuss all your options with you and guide you through the mortgage switching process.
From your point of view as a customer, once you decide that you want to switch then we will send you a link to our secure customer portal so that you can upload the required documentation required for application. We all know paperwork is tedious but all we are asking for is your time, once the documents are pulled together your dedicated mortgage switching expert can work through all, package for the bank, prepare a summary outlining your background, eligibility and demonstration of repayment capacity and we submit to your chosen lender. Once approved we manage the process to completion which should take c. 6 weeks.
Mortgage switching savings are REAL. In June 2019 taking a mortgage of €100,000 with term of 30 years remaining the savings on market from highest to lowest rate are €122 per month. For those of us not so lucky to have a mortgage balance of €100,000 if I bring that to €300,000 then on the same basis the saving is €366 per month or €4,387 per annum. This is an interest saving and given that you pay your mortgage out of net income, think of how much do you would have to earn to repay that extra €366 per month.
Think also of what you could do with that money, save it and pat yourself on the back for switching mortgage every time you see your balance rise. You could also spend it, on yourself on your family, on the things that matter to you in life.
It is your money and this is just interest, interest adds no value to your mortgage, a higher interest rate means you pay more and the outstanding balance on your mortgage reduces more slowly – this is not good. By discussing your requirements with our mortgage team we can look to save you money while ensuring we meet your requirements with regard to product that is more suitable for you, variable rate, fixed rate, split rate options etc.