Looking to switch your mortgage? Here are some things to consider
April 11, 2023
With mortgage rates continuing to climb in recent months, you may be looking at your current rate and wondering if you could do any better. Typically, unless you have a tracker mortgage, switching could save you a significant amount of money. Switching can sometimes seem complicated and understanding all of your options can be difficult. To help get you started we have put together a simple switching guide, based on the type of mortgage you have.
Variable rate
If you are on a variable rate mortgage, your mortgage interest rate can change at any point if the lender raises or lowers their rates. Being on a variable rate means that you can switch to another rate with your current lender, if applicable, or to another lender at any time.
Step 1: Compare the mortgage rates available to you
When deciding whether to switch you should compare the mortgages available from different financial providers to see what savings you could potentially make. You can do this easily using our mortgage comparison Money Tool.
You should also consider checking if you qualify for a better rate with your current lender. You can do this by checking your loan-to-value (LTV) ratio. This is how much you owe on your mortgage in relation to how much your house is worth. If your LTV has reduced since you bought your house you may be able to get a lower mortgage interest rate.
If you have increased the Building Energy Rating (BER) of your home since you took out your mortgage, you may also be eligible for a ‘green’ mortgage rate. Currently these are the lowest rates available so be sure to check if you are eligible when comparing the rates available to you. For more information on BER or to find a BER assessor visit the SEAI website.
Step 2: Gather your documents
Once you have decided to switch, you should speak to your chosen lender to see what documents you will need.
If you are staying with your existing lender you may need to provide:
- an up-to-date valuation of your home if you are moving to a new LTV bracket
- an up-to-date BER if you are availing of a ‘green’ rate
If you are moving to a new lender you will need to:
- apply for a mortgage
This means you will need to provide all of the documents needed for the application such as ID and proof of address, bank statements, salary certificates etc.
To find out more information on the types of documents required you can visit our applying for a mortgage page.
Step 3: Contact your mortgage protection provider
If you switch your mortgage to a new lender you will need to notify your mortgage protection provider of this change. They will assign your existing policy to your new lender.
Fixed rate
If you are on a fixed-rate mortgage this means that you have fixed your mortgage interest rate for a specific number of years. As you have fixed your interest rate, if your lender raises or lowers their variable or fixed rates during your fixed term your rate will not be affected.
Step 1: Find out how much your breakage fee is
Before moving from a fixed rate mortgage, you need to contact your lender to find out how much this will cost you. Lenders typically apply a breakage fee when customers choose to leave a fixed-rate mortgage and this is calculated by the lender. You should consider this in the context of how much you could save overall by switching.
However, if you are coming to the end of a fixed rate, you should start doing some research now. Your lender must tell you about your options 60 days before your fixed rate period ends.
Step 2: Compare the mortgage rates available to you
When deciding whether to switch you should compare the mortgages available from different financial providers to see what savings you could potentially make. You can do this easily using our mortgage comparison Money Tool.
You should also consider checking if you qualify for a better rate with your current lender. You can do this by checking your loan-to-value (LTV) ratio. This is how much you owe on your mortgage in relation to how much your house is worth. If your LTV has reduced since you bought your house you may be able to get a reduction in your mortgage rate.
If you have increased the Building Energy Rating (BER) of your home since you took out your mortgage you may also be eligible for a ‘green’ mortgage rate. Currently these are the lowest rates available so be sure to check if you are eligible when comparing the rates available to you. For more information on BER or to find a BER assessor visit the SEAI website.
Step 3: Gather your documents
Once you have decided to switch your mortgage you should speak to your chosen lender to see what documents you will need.
If you are staying with your existing lender you may need to provide:
- an up-to-date valuation of your home if you are moving to a new LTV bracket
- an up-to-date BER if you are availing of a ‘green’ rate
If you are moving to a new lender you will need to:
- apply for a mortgage
This means you will need to provide all of the documents needed for the application such as ID and proof of address, bank statements, salary certificates etc.
To find out more information on the types of documents required you can visit our applying for a mortgage page.
Step 4: Contact your mortgage protection provider
If you switch your mortgage to a new lender you will need to notify your mortgage protection provider of this change. They will assign your existing policy to your new lender.
Tracker rate
If you are on a tracker rate mortgage this means that your interest rate rises or falls based on the lending rate of the European Central Bank (ECB) rather than your lender. Historically, tracker mortgages have been very low though with the recent increases in the ECB rate they have crept up. If you are on a tracker mortgage and you are looking to switch it is important to remember that tracker rate mortgages are no longer offered by lenders in the Irish market. If you move from a tracker rate, you will never be able to go back on it.
Step 1: Speak to a broker/financial adviser
Before deciding to move away from a tracker mortgage it is important to consider speaking to a broker or financial adviser to decide what the best option for you is. Given the rise in rates the best option for you may be to move to a fixed rate with your current or a new lender. Alternatively, you may be able to afford the rate increases for now and stick with your tracker and wait to see if rates come back down.
Unfortunately, there is no one size fits all approach when it comes to making this decision so speaking to a professional can help you pick the best option for you and your circumstances.
Step 2: Compare the mortgage rates available to you
If you decide to switch you should compare the mortgages available from different financial providers to see what savings you could potentially make. You can do this easily using our mortgage comparison Money Tool.
When researching the mortgage rates available to you, you should consider checking your loan-to-value (LTV) ratio. This is how much you owe on your mortgage in relation to how much your house is worth. If your LTV has reduced since you bought your house you may be eligible for a lower mortgage rate.
If you have increased the Building Energy Rating (BER) of your home since you took out your mortgage you may also be eligible for a ‘green’ mortgage rate. Currently these are thelowest rates available so be sure to check if you are eligible when comparing the rates available to you. For more information on BER or to find a BER assessor visit the SEAI website.
Step 3: Gather your documents
Once you have decided to switch your mortgage you should speak to your chosen lender to see what documents you will need.
If you are staying with your existing lender you may need to provide:
- an up-to-date valuation of your home if you are moving to a new LTV bracket
- an up-to-date BER if you are availing of a ‘green’ rate
If you are moving to a new lender you will need to:
- apply for a mortgage
This means you will need to provide all of the documents needed for the application such as ID and proof of address, bank statements, salary certificates etc.
To find out more information on the types of documents required you can visit our applying for a mortgage page.
Step 4: Contact your mortgage protection provider
If you switch your mortgage to a new lender you will need to notify your mortgage protection provider of this change. They will assign your existing policy to your new lender.
Find out more about switching your mortgage and what to consider.
