Mortgage lenders in the area are currently providing cash incentives and packages to facilitate borrowers in transferring their loans and to incentivize them to do so. According to doddl.ie, five lenders have begun offering these incentives. The online mortgage broker highlights that by switching providers, borrowers could potentially save an average of €7,292 annually. This figure represents a record high, driven by an increasing disparity between the lowest and highest mortgage rates in the market, which currently stands at 3.3%.
The calculation is based on the average new mortgage amount drawn down in the last quarter of 2023, which was €308,814. The highest variable rate observed was 7.15%, while the lowest standard rate was 3.85%. Doddl notes that only 1% of residential mortgages were switched last year, and in the final quarter of 2023, only 8% of new mortgage drawdowns were related to switching. This is in stark contrast to an average switching rate of 36% in the UK.
Martina Hennessy, Managing Director of doddl.ie, stated, “There are currently five mortgage lenders in the Irish market offering cashback incentives to mortgage switchers, up to 2% of the mortgage at the time of switching – including new entrant MoCo.”
“Those lenders offering the most competitive rates have solidified their offerings with comprehensive switcher packages that cover any associated switching costs.”
“Mortgage switching plays a vital role in fostering market discipline and encouraging competition, ultimately leading to lower rates.”
Ms. Hennessy also highlighted that even the lowest rates available in the market come with a switcher package worth €2,000.
Additionally, providers have streamlined the documentation required for switchers, making the process much quicker and simpler.
