It’s amazing how savvy people can be when it comes to cutting the costs of their household bills such as heating or groceries, yet they continually overlook their most significant household expense – their mortgage.
According to the Central Bank, the average interest rate being charged by Irish banks is 4.26%, and that’s only the average – there are many people on rates of 4.5% or higher. Such rates are particularly prevalent for people that took out mortgages between 2009 and 2013. During this period, people were so relieved just to have their mortgage application approved that they really were not particularly concerned what the interest rate was. However, this is something they should be looking into now, because switching your mortgage can lead to significant savings.
The current interest rates being offered by the banks are somewhere between 3.3 and 3.9%. If you consider someone who took out a 30 year mortgage in 2011 on €250,000 at 4.4%, their monthly repayments would be somewhere in the region of €1,346 a month. If that person drew down that mortgage today at, say, a 3.6% interest rate, they would be paying somewhere in the region of €1,235 a month. That’s a saving of €1,332 a year. Over the course of a 25 year mortgage that would save you €34,760.
Not only that, but all the banks are aggressively competing with each other to entice potential customers to switch banks for their mortgage. Many of the banks are offering to pay all, or part, of your legal fees, some banks are even offering cash back to customers.
So what’s the catch? There is none, really. Obviously the banks will only be seeking to take over mortgages that are operating well. So if your mortgage is in arrears and you are in poor financial health, you may not eligible. You will also have to get a new valuation of your home from an auctioneer, which generally costs about €150 plus vat, but that’s it. By and large, your legal fees will be taken care of by the bank, and when you look at the yearly saving you could make, it really is a no-brainer.
For further information on switching your mortgage or indeed any aspect of property/conveyancing law, please do not hesitate to contact Hanahoe and Hanahoe solicitors on 045 897784 or at firstname.lastname@example.org.
This article is merely for information purposes only and is not and should not be taken as legal advice. If you have any queries in relation to this or any other area of property/conveyancing law, you should contact us. No solicitor/client relationship or duty of care or liability of any nature exists between Hanahoe and Hanahoe solicitors, until you receive written confirmation that we are acting as solicitors on your behalf.