Switching your mortgage
What should you know about switching your mortgage?
Switching your mortgage can help you save money if you can secure a lower interest rate or better overall deal, but you need to compare costs carefully before deciding. The process can take several weeks to complete and is similar to applying for a new mortgage, including affordability checks, updated documents and a likely property valuation.
While switching is often best when a fixed rate ends, it may still be worthwhile earlier if the savings outweigh any early repayment fees. Factors like your loan-to-value (LTV) ratio, repayment history and your home's Building Energy Rating (BER) can affect the rates available to you, so always compare the total cost using the CCPC Mortgage comparison tool and look beyond short-term incentives like cashback to understand the real long-term savings.
What is the process for switching your mortgage?
When you switch your mortgage to a new lender, you’ll need to go through the same rigorous application process as you did the first time. This means providing updated documents, proof of income, bank statements and details about your financial situation.
The new lender will assess your eligibility, review your credit history and may require a property valuation and legal checks before approving your switch. Be prepared for a full review of your finances, just as you experienced with your original mortgage application.
Switching your mortgage in Ireland typically takes six to eight weeks from start to finish, though it can sometimes take longer depending on your circumstances and how quickly you provide documents. For a detailed account of the application process, go to applying for a mortgage.
How do interest rates affect your repayments?
Your monthly repayments depend on your outstanding balance, mortgage term and interest rate. Lower rates mean lower repayments and reduced total cost over the mortgage’s lifetime. If you’re on a tracker mortgage, switching lenders will mean you lose that tracker rate permanently, so it’s important to understand the long‑term impact before deciding to switch – you may want to seek financial advice before switching.
Are lenders’ special offers like cashback worth it?
Many lenders offer incentives such as cashbacks, but it is important to look beyond the headline offer and check the long‑term cost.
Mortgage cashback usually comes in two forms:
- Lump‑sum cashback is a one‑off payment you get at the start of your mortgage, often used to help with upfront costs.
- Ongoing cashback is paid monthly as a small percentage of your mortgage for a set number of years.
A lower interest rate can be better value than cashback, but this is not always the case. For a short fixed‑rate period, the cash you receive up front may sometimes work out better. Before accepting any incentive like cashback, you should always:
- Calculate the total cost over the full mortgage term, and
- Calculate the cost over the fixed‑rate period
What you are choosing between
When choosing a mortgage, you may find yourself comparing:
- A lower interest rate with no cashback: Your monthly repayments will be lower, or
- A higher interest rate with cashback: You get money up front, but your monthly repayments will be higher.
However, these are not always your only options. Some mortgages offer competitive interest rates while also including cashback. Choose the option that leaves you better off overall by comparing total repayments over the fixed‑rate period with the value of the cashback.
Simple check:
(Higher monthly repayment − lower monthly repayment) × number of months in the fixed‑rate period = extra cost
Compare this extra cost with the cashback:
- If the extra cost is more than the cashback, the cashback deal may not be worth it
- If the cashback is more than the extra cost, you may be better off overall with the cashback option
You can use the CCPC mortgage comparison tool to see what cashback incentives are available. If you are unsure, speak to your mortgage provider or a mortgage broker to get a clearer picture of which option best suits your situation.
What to keep in mind
In Ireland, most lenders offer fixed-rate mortgages for relatively short terms (usually between three and seven years). After that period ends, you’ll need to decide whether to take out a new fixed-rate deal – based current Irish market interest rates – or switch to a different lender offering a more competitive rate.
How can you get a better rate?
While you may have shopped around and chosen the best rate when you first took out your mortgage, you might not still have the best rate available to you. Other lenders may now offer lower rates, or your circumstances may have changed, such as having a lower loan-to-value (LTV) ratio and a better Building Energy Rating (BER). You might now be on a fixed rate that is no longer competitive.
How does the loan-to-value (LTV) ratio work?
The LTV ratio is the amount you owe on your mortgage compared to how much your home is worth. Lenders generally offer lower rates to borrowers with lower LTV ratios. You will need to get a professional home valuation to apply for a reduced interest rate based on a new, lower LTV ratio. There are two main reasons why your LTV ratio may have improved since you first took out your mortgage:
- Your house value has increased: If your home’s value has gone up since you took out your mortgage, your LTV ratio may now be lower.
- Your outstanding mortgage has decreased: As you pay off your mortgage, your LTV ratio also decreases. If it has been a few years since you started paying your mortgage, you may be able to get a cheaper rate with your new, lower LTV ratio. For more on loan-to-value (LTV) ratios, go to the Central Bank of Ireland’s Mortgage measures explainer.
Building energy rating (BER)
The BER rating of your home is based on how energy efficient your home is. A-rated homes are the most efficient, and G-rated homes are the least efficient. Read about BER ratings on the Sustainable Energy Authority of Ireland’s website.
If you have improved the BER rating of your home by carrying out home improvements, you could qualify for a ‘green mortgage’ rate. This may be at a lower rate than your current mortgage. Not all lenders offer green mortgages or lower rates for improved BER, so check with your lender.
Fixed-rate mortgage
A fixed rate mortgage means you are on a set interest rate for a set period. If the bank’s interest rates change during this period, your mortgage will not be affected because your interest rate is fixed.
If you are on a fixed rate mortgage, you could be paying more than you would if you were on a variable rate. You could save money by switching, but you may have to pay a fee for leaving the fixed rate early.
If you are coming towards the end of your fixed term, you need to decide if you should switch to a variable rate or fix again. You may also consider switching to a fixed or variable rate with another lender. For more on rates, visit our understanding mortgages page.
What fees and costs should you consider?
Switching may involve legal fees, valuation fees and possible penalties for breaking a fixed-rate mortgage. Always review your current mortgage terms and check what costs apply before switching. Check with your lender for a full breakdown of all possible fees and costs.
What should you check before switching?
- Compare rates and offers using the CCPC Switchers comparison tool
- Review your current mortgage for penalties and fees
- Check your eligibility based on LTV, BER, and repayment history
- Ensure you can secure mortgage protection insurance at the new lender
- If you’re unsure, seek independent financial advice before switching
Switching if you have a subprime mortgage
A subprime mortgage is a home loan offered to borrowers with a poor or limited credit history. Because these loans carry higher risk for lenders, they usually come with higher interest rates and less favourable terms compared to standard mortgages.
If you have a subprime mortgage, you might be paying more than necessary. Switching to a lower rate could be possible if your loan is 80% or less of your property’s value and your credit record and income have improved. For non-first-time buyers of a principal dwelling home (PDH), Central Bank rules set a maximum loan-to-value (LTV) of 80% and a loan-to-income (LTI) cap of 3.5 times your gross income.
However, switcher mortgages – where you transfer your mortgage to a new lender or product – are exempt from these LTV and LTI limits. This exemption does not guarantee that you will be able to switch. You will still need to meet the new lender’s requirements, including affordability checks, credit assessment and any other eligibility criteria they apply.
As a result, you may still be able to switch even if you do not meet the standard LTV or LTI thresholds, depending on your circumstances and the lender’s criteria.
Go to our page on switching from a subprime mortgage for more information.
