Should I switch my mortgage in Ireland?

Start with your current mortgage, not the headline rate

Before comparing lenders, write down your current balance, interest rate, repayment type, remaining term and whether you are fixed or variable. A lower advertised rate is useful only if you can actually qualify for it and the overall cost is lower.

Your loan-to-value (LTV) can also have changed since you took out the mortgage. If your balance has fallen or the property has increased in value, you may qualify for a different rate band. That can make asking your existing lender for a new rate worthwhile even if you do not switch provider.

What can you save by switching?

The basic comparison is the difference between what you would pay under the current deal and what you would pay under the new deal. For a proper decision, compare the monthly repayment and the total cost over a sensible period, such as the remaining term or the fixed-rate period.

Use our mortgage switching savings calculator to test different balances, rates and terms.

Check your LTV before you compare rates

LTV is the mortgage balance divided by the property's current value. It can affect the interest rate a lender offers. For example, if your mortgage has fallen from €280,000 to €240,000 while the property is worth €400,000, your LTV is 60%.

That matters because you should not compare your current rate with a random advertised rate. Compare with rates you could realistically qualify for based on your LTV, BER, borrower profile and the product's other conditions.

What costs should you include?

• Early repayment or breakage charge: particularly important if you are still inside a fixed-rate period.
• Legal costs: switching lender normally involves conveyancing work.
• Valuation: a new lender may require an updated property valuation.
• Other product costs: check the new mortgage's fees, conditions and insurance requirements.
• Cashback or incentives: treat these as part of the calculation rather than assuming they automatically make a mortgage cheaper.

Also check whether a cashback offer has clawback conditions if you leave the lender early.

Fixed-rate mortgage: when should you switch?

Switching around the end of a fixed period is often the simplest time to compare alternatives because you can avoid a breakage charge that might apply during the fixed term. But an earlier switch can still make sense if the expected saving is greater than the cost of breaking the existing deal.

Under the Central Bank's Consumer Protection Code, lenders have obligations around mortgage switching information. The Central Bank says lenders must tell borrowers about cheaper mortgage options 60 days before a fixed rate ends and provide a personalised saving estimate alongside alternative mortgage options.

What is the switching process?

1. Check your current rate, balance, term and LTV.
2. Ask your current lender what cheaper options are available to you.
3. Compare alternative lenders using the same balance and remaining term.
4. Calculate the likely saving after fees and any breakage charge.
5. Gather documents such as proof of income, identification and financial statements if a new application is required.
6. Apply, complete the lender's assessment and arrange the legal work.
7. Before completion, confirm the final rate, repayment, term and any conditions.

Switching is still a full mortgage application. A cheaper rate does not guarantee approval with another lender.

Cashback: don't let the headline figure decide

A €3,000 or €5,000 cashback offer can look attractive, but a higher interest rate can cost more than the incentive saves. Compare the cost over the period for which the incentive applies and over the longer term.

For example, if one mortgage costs €80 more per month than another for 36 months, that difference is €2,880. A €3,000 cashback payment would only be €120 ahead before considering other fees and what happens after the fixed period.

What if you are not ready to switch?

You do not need to switch immediately. If the numbers are marginal, keep your mortgage under review, improve your LTV where possible, continue building your savings and check again when your fixed rate is approaching its end.

It can also be worth asking your existing lender whether a different rate is available to you. The Central Bank's mortgage measures exclude switcher mortgages from the LTI and LTV limits, but lenders still apply their own credit and product criteria.

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