Switching mortgages has never been easier, expert says
- Strong growth in mortgage switching with volumes up 15.1% year on year
- Common misconceptions are that mortgage switching is complex, costly and not worth the hassle, this is NOT true.
Read the full article here: www.irishexaminer.com
Wary mortgage holders put off by the perceived hassle of switching lenders have been urged to reconsider by an expert who says it has never been easier to change.
Managing director of mortgage switching platform Doddl.ie Martina Hennessy said there were some common misconceptions about mortgage switching, namely that it is difficult, costly and not worth the hassle.
This is not the case, she claimed, once time is put into the process initially.
“The mortgage switching process takes on average six to eight weeks. The time taken to switch for the mortgage holder is front-loaded to compiling documentation for the mortgage application with the new lender.
“From there, the mortgage broker, bank and solicitor take over to complete the switch, with input at intervals from the mortgage holder,” Ms Hennessy said.
A report from the Commission for the Regulation of Utilities (CRU) this week shows that Irish consumers remain stubborn when it comes to swapping their energy providers, despite the savings that could potentially be made.
Significant savings can also be made if households switch mortgages, Doddl.ie said.
“The doddl.ie mortgage switching index calculates the savings between the highest and lowest rate on market to be €135 per month for every €100,000 owed on a 25-year mortgage,” Ms Hennessy said.
Doddl.ie said that currently, almost all lenders have switcher packages.
They essentially are cash amounts that are lodged to your current account post drawdown and which are designed to cover the legal and valuation costs of switching mortgage, according to Ms Hennessy.
“These range from a value of €1,650, €2,000, €3,000, 2% cashback, ie 2% of your mortgage back in cash, and up to 3% cashback depending on lender.”
Research from the Central Bank last year found that just 2.9% of mortgage-holders switched provider during the second half of 2019, despite the savings that could be made.
Authors Shane Byrne, Kenneth Devine, and Yvonne McCarthy found through their research that three in every five mortgages – more than 112,000 – classified as eligible for switching stood to save more than €1,000 within the first year, following a switch.
Almost 110,500 stood to save more than €10,000 over the remaining term, they estimated.
Switchers tend to have higher average mortgage balances, higher average valued properties, and shorter remaining mortgage terms, they said.
However, a significant proportion of mortgage holders report a lack of knowledge or have a worry about switching, with gender, education, and financial literacy some of the factors holding them back from doing so, the authors found.
Find out about switching your mortgage with doddl.