mortgage news article - doddl

It’s a doddl – How to reduce your mortgage term by 10 years

February 07, 2020

Switching your mortgage could allow you to finish your mortgage 10 years earlier and save tens of thousands on interest repayments.

Mortgage Switching is associated with reducing interest rates and as a result reducing mortgage repayments. However, a huge benefit of switching your mortgage can be to reduce the term of the mortgage. 

With banks offering mortgages that expire at applicant age 70 years and terms of up to 35 years, more and more mortgage-holders currently have mortgages which will expire after they retire.

Consider the example of Paul & Aoife who took out their mortgage five years ago, opting for a mortgage term of 35 years. 

They are repaying their mortgage comfortably and have rolled off an initial fixed rate onto their lenders standard variable rate. 

Their mortgage balance is €300,000 and term remaining on their mortgage 30 years.

On their current standard variable rate of 4.5% they repay €1,520 per month. 

If Paul & Aoife were to switch their mortgage to a 5 year fixed rate of 2.2% then their repayments would drop to €1,139 per month, meaning a saving of €381 per month or €22,860 over five years. 

Obviously this saving is huge and very attractive, however, what if Paul & Aoife continued to repay the same mortgage amount of €1,520 but reduce the term of their mortgage?

By continuing to make the same mortgage repayment Paul and Aoife could decrease their term from 30 years to 20 years 6 months and by paying just €26 more per month i.e. €1,546 per month they could knock a full 10 years off their mortgage, reducing their term to 20 years.

The overall cost of credit on the loan would decrease substantially by reducing the term by 10 years and Paul & Aoife would save tens of thousand in interest based on their reduced term. 

Being able to reduce your mortgage term by up to 10 years is a reality. 

Mortgage Switching has so many benefits to allow you to live better, whether it’s lower repayments or reduced mortgage terms. 

By reducing the interest you repay on your mortgage you can live better. Interest offers no value to you or your mortgage. Be smart, switch your mortgage and don’t pay needless interest. 

At doddl we offer tailored mortgage switching advice to come up with a solution that best meets your needs. Our service is Free and Impartial. 

Banks offer cash switcher packages at mortgage draw down to cover switching costs (legal and valuation). We offer the lowest rates on market working with all the banks. Speak to one of our qualified advisors on 01 6624600. 

There are no catches, this just makes sense. Switch your mortgage and save money, plus be mortgage free sooner!

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