Longford’s mortgage holders should consider making a switch
Hundreds, or even thousands, of mortgage holders in Longford are significantly overpaying on their mortgage but are still reluctant to switch to lower rates, which is hindering market competitiveness and generally keeping rates high.
This is the contention of the Association of Irish Mortgage Advisors (AIMA) who say that, based on assessment of figures, the volume of mortgage switching remains at one quarter of what it was at the peak of the boom, and that the vast majority of the estimated 175,000 mortgage holders in Ireland on standard variable rates are overpaying by hundreds, if not thousands of Euro, each year, which equates to approximately 1,553 mortgage holders in Longford alone.
Trevor Grant, Chairperson of AIMA explained: “The New Year is a great time to take your finances by the reins, which is why we are really trying to highlight this issue now. It is advised that all mortgage holders review their rate and mortgage agreement every two years to ensure they are getting the best value, but the pace of mortgage switching is too slow in this country and 2020 mortgage switching figures should be at least double those of 2019.
“By our own market analysis, we would estimate that over 1,500 homeowners in Longford are on a variable rate – and we believe that less than one in five these are on the best available rate and therefore the majority could save by switching. And although they are the group most susceptible to paying more than they need to, it’s not only variable rate mortgage holders that need to switch – there’s a really good chance that those on a fixed rate can save big money by reviewing their rate and their lender periodically. So that means even greater numbers of Longford mortgage holders could be in for savings.
“In addition, if more people switched, the banks would be more likely to lower their rates to protect their market share – this is simple economics.”
AIMA contend that although there has been some growth in the number of people switching year on year, the pace has been too slow – particularly in the last two years when rates have dropped for new mortgages and banks have become increasingly competitive on fixed rates. The broker representatives argue that homeowners should be coming in their droves to actively switch and save hundreds, if not thousands of Euro, but that inertia and/or apathy appear to be preventing this.
AIMA have reported that real life examples of switching, conducted by their broker members in the final few weeks of 2019, show the huge savings that can be made – not only for those with a low LTV on their mortgage – but for those whose LTV is between 80 – 90% also.