Renewed competition in mortgage market sparks surge in homeowners switching providers.
The Q1 Irish Independent doddl.ie Mortgage Switching Index is out today.
Read the article here: independent.ie
The Index highlights the savings that can be made by switching mortgage. The average saving is now €4,090 per annum.
This means a saving of €135 per month for every €100,000 owed on a 25-year mortgage for those who switch.
It takes between 6-8 weeks to complete a mortgage switiching transaction but the actual applicants time input is on average six hours
- Research & Consideration phase – one hour – made a lot easier by our doddl mortgage switching calculator which immediately shows if you can save and our team of mortgage specialists who talk you through all options to secure the best option for you for the eight lenders we work with
- Documentation phase – three hours – this is the core of the time spent on making the switch for our applicants – made a lot easier at doddl due to our secure customer portal which allows you to complete your application digitally & upload your mortgage documents securely
- Professional services, granting access to Valuer & meeting your solicitor in person or virtually – two hours. The valuation and legal fees are covered by most lenders via their switcher packages which are up to 2% of your mortgage back in cash at draw down. At doddl we do not charge a fee.
In Q1 the most popular rate for our switcher clients was a 3 year fixed rate. Taking the annual savings from the index of €4,090 this means that over 3 years you could save over €12,000 for only six hours of your time.
Mortgage switching increased by 15% year on year in Q1 and there was a jump in mortgage switching approvals of 30% month on month February to March. This was to some degree due to Ulster Banks exit announcement and more mortgage holders taking control of their mortgage destiny.
New lower long term fixed rates were announced last week from broker only Avant Money & Finance Ireland.
Martina Hennessy, managing director of Doddl.ie, says an application to switch mortgage can take as little as six hours.
There has been a surge in homeowners switching mortgages to benefit from renewed competition in the market.
An extra 30pc of homeowners were approved to move their mortgage to a new provider between February and March of this year.
The average mortgage holder, who is not on a tracker, can save €12,000 over three years by switching, according to the latest edition of the Irish Independent Doddl.ie switching index.
It takes just six hours to get the documentation together and apply for a switch.
The rise in the number of new switcher approvals between February and March was driven by the announcement of Ulster Bank’s exit from this market.
Doddl.ie managing director Martina Hennessy said Irish mortgage holders generally paid up and did not question the interest rate they were charged.
“However, Ulster Bank’s announcement in February saw customers who ordinarily may not have considered switching taking control of their mortgage and, in doing so, saving themselves thousands,” she said.
Over the first three months of this year, the numbers switching their mortgage increased by over 15pc on the same period in 2020, with more people using time during the latest lockdown to switch and save.
This trend is expected to continue, with the announcement of new 15- and 20-year long-term rates by Finance Ireland, and Avant Money reducing a number of its fixed rates.
Ms Hennessy said the latest research carried out for the index showed that just six hours of work can save the average Irish homeowner more than €12,000 over three years.
Homeowners can be paying an average €4,000 in extra mortgage repayments per year by not switching lenders, according to the research.
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 €253,562.
The gap between the highest and lowest rates on the market has widened in the past year.
This means a saving of €135 per month for every €100,000 owed on a 25-year mortgage for those who switch.
It takes six to eight weeks to complete a mortgage switching transaction.
“A survey of the time inputted by our mortgage switchers showed an average of six hours was spent between research, compiling documentation, completing application forms and engaging professional valuation and legal services,” Ms Hennessy said.
The research and consideration phase takes one hour. The largest amount of time in the process is three hours for putting together the documentation for both the application and completion of the switch.
Providing entry to the valuer and meeting your solicitor to sign the new loan offer took on average two hours, she said.
In the past week, Finance Ireland has introduced 20-year mortgage rates.
Ms Hennessy said the offerings came with features that would see the rates reduce over time, based on loan to values.
And Avant Money has also introduced new four- and 10-year rates, which are the lowest in the market.
Many mortgage holders who were looking to top up for home improvements had chosen to shop around for better market rates, as opposed to just topping up with their existing mortgage lender, she said.
