What is a switcher mortgage, Why would I switch and How do I switch?…. All questions that as a mortgage broker we hear on a regular basis. While financial jargon terrifies most people, Switcher Mortgages are nothing to be scared of. In fact they are great for an awful lot of home owners. Here’s a one stop show for info on switching and saving on your mortgage in Ireland.
What is a Switcher Mortgage?
It is exactly what it says on the tin. It is when you move your mortgage from the lender you are with, to a new one, usually because they will offer you a better rate or better terms.
Why Switch Your Mortgage?
Most people are switching their mortgage to save money. Your mortgage rate (interest rate) is essentially the cost of your mortgage, rates have been falling for a decade in Ireland now so anyone who has taken out a mortgage in the last 10-12 years and hasn’t switched, could get a much lower rate if they move. Traditionally, our high street banks, the household names of Irish Banking, have been where people go to get their mortgage, however these banks are generally the most expensive places to have a mortgage too. A mortgage is one of the biggest household bills in most homes, if not the biggest, but when we think about saving money we often don’t think of our mortgage. In reality it is just like your Broadband, TV, energy or any other bill in the house, if you stay with the same provider for years you will end up overpaying.
How do I Switch?
To switch your mortgage you will essentially make a mortgage application to the new lender you want to move to. You will have to meet the same criteria as you did before in terms of your finances and your ability to repay, but you dont have to have a deposit as you aren’t buying the house again. When the new lender grants you mortgage approval, they will do so on the provision your new mortgage is used to pay off the existing mortgage immediately.
What are the costs involved?
There are some costs. You will need your solicitor again, although most solicitors charge less for services on a Switcher Mortgage vs when you are buying a house, as they are only dealing with the mortgage legals, and not the house contract, transfer of ownership etc. The bank will also pass on the cost of an independent valuation, which is usually €150. There is good news on this front though as most (not all) lenders offer a cashback sum on Switcher Mortgages, which is designed to help you cover these costs.
So everyone should be switching!
Switching a mortgage will save a lot of money for most people, but not everyone can or should switch. Those lucky enough to have a Tracker Mortgage (offered before 2008) are benefitting from a very good mortgage rate at the moment and no lender is likely to have anything lower.
If you are interested in switching your mortgage and find out what your options are, we offer a FREE Mortgage Review service. It is a quick 15 minute call to talk through the details of your mortgage, finances and what the options open too you are. even if you cannot switch your mortgage there are some other ways to make smaller savings on it to, all of which can be covered with you. Check out our Free Mortgage Review