Switching your mortgage

You could make significant savings on your mortgage if you can switch to a lower interest rate. Since 1 January 2019, the Central Bank of Ireland has put new measures in place to make it easier to switch your mortgage.

• Tell you about cheaper options 60 days before your fixed rate mortgage period ends
• Notify you, if you are on a variable rate (but not a tracker), if you can move to a cheaper rate due to a change in your loan-to-value ratio. You will need to provide an up-to-date valuation for this.
• Explain the pros and cons of any mortgage incentives such as cashback offers in a clear way
• Give you a comparison of how much your mortgage costs versus other options offered by your lender if you ask for one
• Give switchers all the information they need to switch including how long it will take
• Give you a decision within ten business days of receiving a completed mortgage application

• Loan-to-value (LTV) ratio – how much you owe on your mortgage in relation to how much your house is worth. Lenders will consider the LTV ratio when you make your application. An up-to-date valuation is needed to get an accurate value of the property.
• Outstanding balance – if you have a small outstanding balance on your mortgage you may find it difficult to switch as lenders may have a minimum amount they are willing to lend.
• Negative equity – lenders may not be willing to take you on as a mortgage customer if you are in negative equity i.e. if you owe more on your mortgage than your property is worth.
• Mortgage term – minimum or maximum loan terms may apply when you are switching. For example, some lenders may not accept an application for a mortgage over 30 years or less than five years.
• Repayment history – whether you have been meeting your mortgage repayments over the previous 12 months and any other financial obligations will be considered as part of your new application. Lenders will examine your credit history as part of this.
• Fixed Term – If you are on a fixed rate and want to break out of it early, you may have to pay a fee, sometimes called a redemption charge. The cost of this charge should be weighed against potential savings that could be made by switching or alternatively you can wait until you are coming to the end of the fixed term and then switch.