Stephen Cox • 06 Mar 2019

Thinking of Switching Mortgage Provider?

Thinking of Switching Mortgage Provider?

Who’s offering the best deal?

Switching mortgage provider is when you decide to refinance your existing mortgage without actually moving to a new house. The criteria set by the Central Bank in Feb 2015 does not apply to refinance or switcher applications. There are a variety of reasons why people would consider refinancing, namely:

  • To get a lower better rate and potentially finish your mortgage over a shorter period of time, saving tens of thousands in the process.
  • To carry out some home improvements.
  • To purchase a holiday home.
  • To clear outstanding expensive short-term debt.
  • To assist family members with deposit on their property purchase.
  • Existing provider has increased rates without an increase in ECB rates.

There are no shortage of offers available to consumers who wish to switch their mortgage provider and below is a summary of what is currently available;

  • Bank of Ireland and EBS offer 2% cashback on the mortgage amount now and a further 1% cashback in in 5 years’ time.
  • PTSB offer 2% cashback on the mortgage amount now and 2% monthly repayment reduction until end of 2027. 
  • KBC Homeloans offer €3,000 towards the costs of switching.
  • AIB Mortgages offer €2,000 towards the costs of switching.
  • Ulster Bank offer €1,500 towards the costs of switching.

The benefit of switching mortgage provider is best illustrated by the following example;

Mortgage Amount - €300,000
Term - 25 years
Rate – 4.20% (APRC 4.3%)
Repayment - €1,616.82 per month
 

If the same example is illustrated with a loan to value (LTV) rate from the market the monthly repayment changes as follows;

Mortgage Amount - €300,000
Term – 25 years
Rate – 2.95% (APRC 3.00%)
Repayment - €1,414.83 per month
 

This represents a monthly saving of €201.99 per month or more significantly a total saving of €60,597 over the 25 year term.

Alternatively, and something that is becoming very popular is the option to keep repayments at the current level of €1,616.82 per month in the example above. This option would have the effect of reducing your outstanding mortgage term by 4 years and 2 months reducing the overall term from 25 years to 20 years and 10 months!

Fixed rate options remain popular in the current switcher market and a summary of the cheapest rates available as of 1st March 2019 are;

1 year fixed rate -       2.50% (APRC 3.05%) provided by KBC

2 year fixed rate -       2.30% (APRC 4.00%) provided by Ulster Bank

3 years fixed rate -     2.65% (APRC 2.97%) provided by KBC

4 year fixed rate -       2.60%  (APRC 3.70%) provided by Ulster Bank

5 year fixed rate -       2.80% (APRC 2.92%) provided by KBC

More and more mortgagees are becoming aware of the opportunity to make significant savings and for this reason the switcher mortgage market is beginning to increase.

With house prices increasing again since the economic downturn the 80% loan to value threshold is easier to achieve. Only existing mortgage holders who are lucky enough to have a tracker rate do not require their mortgage to be re-assessed.

If you want to make sure you’re availing of the most competitive mortgage rate available why not contact us at CMCC Financial Solutions on 01 6532260 or email mortgages@cmcc.ie for an independent mortgage solution.

Stephen Cox

Sandyford
Contact Stephen

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