To Switch or How to Switch

Switch mortgage providers – does it make sense?

With mortgage rates as low as 1.95%, many people are looking to switch mortgage providers in Ireland. Even more, a new mortgage lender Avant Money entered the Irish mortgage market in Sept 2020 with 7-year fixed rates as low as 1.95%**. This is the lowest rate currently available in the Irish mortgage market, and no surprise in Jan 2021 the company revealed it has received €200m in new mortgage applications.

This is a very welcome and needed development in the Irish mortgage market which has one of highest mortgage lending rates in Europe. Avant Money is a consumer-finance company based in Co. Leitrim and owned by Spanish banking group Bankinter. Avant Money mortgages are currently available exclusively via a broker network, and Mortgage123 is proud to be one of these brokers.

Switch Mortgage – What Rate are You On?

Switching mortgage providers is open to borrowers who are either on a lender’s standard variable rate or nearing the end of a fixed rate product. It may even be possible if in a current fixed rate, but the key here is to contact your lender and ask for a statement of breakage fees.

What About Switching Costs?

There are certain legal documents required in order to switch a mortgage provider.

Legals – a solicitor to do the legal work of getting one lender off the deeds and replacing it with the other. Also, getting redemption statements and drawing down funds from your new lender.

Valuation – an up-to-date valuation is needed to get an accurate current value of the property.

Costs –  valuation and legals cost of around €1,200. However, the advantages if you get your switch right far outweigh these costs.

What Can You Save – Switch Mortgage?

A good example for instance would be if you were with your current lender and on a variable rate of 4%, you then switch to Avant Mortgages on a five-year fixed at 1.95%**

If you had a mortgage of €250,000 with 25 years remaining, this would be costing you €1,319 per month. However, if you switched, it would reduce to €1,053 per month. You could also choose to keep your payment at €1,319 and reduce your mortgage term to 19 years, saving 6 years mortgage payments. (See Example 1 and Example 2)

There are also huge advantages on what you will save on interest payments throughout the term of the mortgage by keeping on top of rates, you could save 10s of thousands.

Example 1

Reduce Mortgage Repayments per month

Variable Mortgage Rate – 4% Switch to Avant Money rate of 1.95%**
Current Mortgage Repayments – €1,319 per month Reduced Mortgage Repayments – €1,053 per month
Mortgage outstanding €250,000 Mortgage outstanding €250,000
Term – 25 years remaining. Term – 25 years remaining.

Example 2

Reduce Mortgage Term

Variable Mortgage Rate – 4% Switch to Avant Money rate of 1.95%**
Term – 25 years remaining. Reduced Mortgage Term – 19 years
Mortgage outstanding €250,000 Mortgage outstanding €250,000
Current Repayments – €1,319 per month Mortgage Repayments – €1,319 per month

In the current climate, if you are paying more than 3% on your mortgage, you need to talk to us.

  • ** Subject to T&Cs

Mortgage Guide

Get the information you need to start your journey to buying your dream home!

Mortgage Checklist

A list of the key documents you need when applying for your mortgage.

After AIP Guide

If you have Approval in Principle, this guide will help you with the next steps.