exchanging contracts - switch mortgages 2023 - doddl

Homeowners urged to act now to avoid mortgage repayment hikes

September 26, 2022

Our Q2 Irish Independent doddl.ie mortgage switching index is out!

We highlight the significant savings that can be made by switching your mortgage and also look at whether those on short term fixed rates should look to break out of their fixed rate and lock into a longer term fixed rate in anticipation of expected rate increases.

Key item is to check if you would have a break penalty to break out of your current fixed rate. Penalties, in general, are calculated based on a number of items including wholesale funding costs. If funding costs when you break out are lowe than when you lock in you could have a penalty. Funding costs have increased in the last six months therefore potential penalties should have decreased. Contact your mortgage lender to find out if you would have a penalty to break out and make the decision as to whether it makes financial sense for you to fix your rate for loner to ensure security over repayments.

Always get market based advice before locking into a fixed rate to ensure you don’t pay more than you need to.

See full article in the Independent.ie 

Experts say homeowners are paying an average 4,595 euro in extra repayments per year by not switching lenders.

Mortgage holders have been urged to act now if their interest rate deal is nearing its end (PA)

Mortgage holders on either variable or fixed rates with less than two years to run need to act now to avoid challenging repayment hikes, experts have warned.

They say people rolling out of historic low fixed-term contracts in the next few years will face immediate rate increases of more than 1%.

Homeowners are paying an average 4,595 euro in extra mortgage repayments per year by not switching lenders, the quarter two doddl.ie mortgage switching index found.

This is almost 500 euro more than 12 months ago, it said.

This figure increases to 4,678 euro if your home has a building energy rating of B3+ and you are eligible for a Green rate, with the introduction of a market leading fixed rate of 1.9%.

The index is based on the average mortgage drawn down for new lending in both the first-time buyer and second-hand mover markets, currently 284,903 euro.

Mortgage switching activity has surged, with approval volumes increasing year on year by 153% and the numbers switching mortgage now double that of four years ago.

Martina Hennessy, managing director of doddl.ie, said: “There are two certainties – we are in for a period of sustained rate increases and the pillar banks, who have some of the highest rates on the market, will soon implement rate increases.

“The vast majority of mortgage holders will not have felt any affects from recent rises as they are with AIB, Bank of Ireland or Permanent TSB, who have not moved their rates.

“If you are on a variable rate, unless you plan to pay it off in the immediate short-term, you need to act now and fix your rate to avoid imminent rate increases.

“Even a phone call to your bank will save you 1% immediately, and several percentage points a year down the road.

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