Record numbers switch mortgages (Irish Examiner)
Lenders are offering more “sweeteners” such as paid legal fees, paid valuations and cash-back incentives to entice homeowners to switch.
The claims are from new research by the Irish Mortgage Corporation, which also found there may be certain clauses, such as redemption fees, attached to such sweeteners.
“It is very important that homeowners understand both the short-term and long-term benefit of any mortgage offer. Under no circumstance should a homeowner switch their mortgage without doing their homework first,” said Frank Conway, director of the Irish Mortgage Corporation.
Now that Irish consumers have caught the mortgage switcher bug, he said, they are unlikely to pull back any time soon.
“In addition to lowering their monthly repayments, many homeowners also choose to take out additional cash to help towards home improvements and home expansions,” Mr Conway claimed.
The increase of 20% in mortgage switching in the first quarter of this year is as a result of intense competition among mortgage providers, which has resulted in banks offering very competitive mortgage rates to existing homeowners, according to the research.
“Those who have owned their homes for a number of years are the real winners, particularly when a low loan-to-value is available,” said Mr Conway.
Homeowners with a loan-to-value of 50% or less can avail of some of the best interest rates available on the Irish market, he said.
A loan-to-value is the measure of the outstanding mortgage amount when measured against the current market value of a person’s home.