Switching loan provider can lead to savings

A significant gap between the highest and lowest interest rates means that average homeowner could be paying up to €4,000 extra per year in mortgage payments, a new survey has revealed.

The introduction of a mortgage rate of less than 2% has driven a surge in switching activity across Ireland’s mortgage brokers in the past quarter, according to the Q3 doddl Mortgage Switching Index.

The annual savings indicated by the index have grown by €653 in the past three months thanks to the arrival of Avant Money with the first below 2% rate in the market since tracker rates were available.

And a record spread of 2.55% between the highest and lowest interest rates available on the market means monthly savings of up to 31.9% are now possible for mortgage holders – the biggest since the Index began five years ago.

This works out at a saving of €135 per month for every €100,000 owed on a 25-year mortgage.

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 Q3 2020, currently €253,759.

“The introduction by Avant Money of a sub 2% mortgage interest rate means that rates are now the lowest they have been for over 12 years since the withdrawal of tracker mortgages in 2008,” said Martina Hennessy, Managing Director of doddl.ie.

“At doddl we have seen a 60% uplift in volumes of switcher applications since Avant entered the market as a challenger and there has been a real spike across all specialist mortgage brokers.

For more, read this week’s Connacht Tribune.

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