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Prepare for Mortgage Payment Increases: Tips for Irish Homeowners as Fixed-Rate Mortgages Come to an End

March 21, 2023

As fixed-rate mortgages come to an end, Irish homeowners could see an immediate payment increase of up to €489 per month, according to the latest doddl.ie Mortgage Switching Index. With approximately €12bn worth of mortgages rolling off fixed rates in the next three years, an estimated 50,000 homeowners will be facing a vastly different rate environment.

Our latest Index based on Q4 2022 data shows that for those who fixed their rate at 2.5% on the average mortgage in the past five years of €253,950, rolling out onto a market where fixed rates at up to 5.95% will cost an extra €5,870 per annum. With rates continuing to rise, it’s important for mortgage holders to investigate whether exiting their current fixed rate early might lead to future savings.

At doddl.ie, we urge mortgage holders to take control of their mortgage, understand what rate you are repayment and when your current fixed rate expires. For those on fixed rates with short terms remaining it may be worth considering exiting their fixed rate early to lock in a rate before they rise further. Due to increasing funding costs, it’s unlikely that anyone who locked into a fixed rate over two years ago would have a break penalty but this can be checked with your mortgage lender. For the majority, switching now will not result in lower than current repayments, but you could save massively in the medium term if you get market-based advice and choose the right rate rather than accepting the first rate offered to you by your lender.

It’s worth noting that the non-bank lenders such as ICS and Finance Ireland, who have grown in market share to 15% collectively, were the first to announce increases and now have some of the highest rates on the market. In fact, Finance Ireland has the highest rate on the market as at 16th March 2023, a three-year fixed rate of 7.3%.

A mortgage holder with Finance Ireland could switch to a three-year rate of 3.25%, saving €625 per month on a €250,000 mortgage or €22,500 over the three-year fixed term.

For homeowners who are unsure about their options, seeking advice from an independent mortgage broker is highly recommended. They can help you navigate the complex mortgage market, find the best rates and deals, and ensure that you’re making an informed decision that’s right for your financial circumstances.

In summary, with fixed-rate mortgages expiring and rates continuing to rise, Irish homeowners could be facing significant increases in their monthly mortgage payments. It’s important to investigate your options and consider exiting your fixed rate early to lock in a rate before they rise further. Seeking advice from an independent mortgage broker can help you find the best rates and deals and make an informed decision that’s right for your financial circumstances.

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