Explainer - How is the Central Bank making mortgage switching easier?

Switch your mortgage

Taking out a mortgage to buy a home is the biggest financial commitment most people will make in their lives. Therefore, it is important to get the best deal that you can on the loan. However, even if you get the best deal when you take out your mortgage, over time cheaper mortgages may become available to you. This means you could end up paying more for your existing mortgage than you need to every month.

Switching mortgage

One of the easiest ways to save money on your mortgage is to switch to a cheaper one. A cheaper mortgage could be available from your bank, or offered by a different lender.

Our research shows that one in five people in Ireland can save money by switching mortgage provider. The amount of money you can save by switching can be significant and may amount to thousands of euro over the lifetime of the mortgage. However, despite these potential savings, most people who have a mortgage never switch to a cheaper offer.

Further research shows that the reasons more people don’t switch mortgage is because they:

  • Don’t realise how much money they could save
  • Find it difficult to compare mortgages
  • Believe the process is too complicated
  • Think that switching takes too long.

Making switching easier

To make it easier for you to switch your mortgage, the Central Bank of Ireland is introducing new measures that lenders will have to follow.

In summary, the new measures mean lenders must:

  • Tell you about cheaper options 60 days before you come out of a fixed rate mortgage
  • Tell you if you can switch to a cheaper mortgage based on how much equity is in your home
  • Clearly explain the pros and cons of any mortgage incentives such as cashback offers
  • Give you a comparison of how much your mortgage costs versus other options offered by your lender if you ask for one
  • Give switchers all the information they need to switch, including how long it will take
  • Give you a decision within ten business days of receiving a completed mortgage application.

Banks and mortgage provider have to put these measures in place by 1 January 2019.

Find out more

Read our press release to find out more about our new mortgage switching measures.

Mortgage Switching Measures

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