Many Irish homeowners could shave ten years off their home repayments by switching mortgages and keeping their repayments at the same level, a new report has found.
The average Irish homeowner is needlessly paying an average €3,480 in extra mortgage repayments per year by not switching lenders, the doddl mortgage switching index has found. The spread between the highest and lowest interest rates available on the market has now grown to 2.25% or €290 per month in terms of monthly repayments for an average private dwelling house mortgage.
This large spread means monthly repayment savings of up to 27% are possible for homeowners who switch their mortgage – a gap that has widened by 6% in 12 months. The highest rate of repayment on the average 25 year mortgage as at Q4 2019 is €1,346, while mortgage holders on the lowest rate are paying €1,056 per month.
The Index is based on the average mortgage drawn down for new lending in both the first-time buyer and second-hand mover markets as at Q4 2019, currently €242,175. The doddl Index looks at the total number of switcher transactions per quarter as a percentage of all home loan transactions, excluding Buy To Let mortgages, to give an accurate picture of principal private dwelling house credit.
Compiled by impartial mortgage switching experts doddl.ie, the Index highlights the differential between the lowest and highest non-discounted interest rates on the market – and the potential savings available. And this has increased again with the introduction of a new 2.2% five-year fixed rate onto the market in January – more than half the highest available rate of 4.5%
“While mortgage switching is traditionally associated with reducing interest rates and lowering repayments, a huge benefit of switching can be to reduce the term of the mortgage,” said doddl.ie Managing Director Martina Hennessy.
Mortgage switching transactions represented 14% of home loan lending in 2019.