How to switch to a better mortgage deal
Mortgage switching in Ireland could save you thousands of euro every year. Here’s all you need to know about switching your mortgage for lower monthly payments, a reduced loan term, or both.
Why switch your mortgage?
Irish homeowners could be overpaying by thousands simply by sticking with their current mortgage lender.
When your fixed rate mortgage ends, you’ll automatically move to the lender’s more expensive standard variable rate. This means your monthly repayments increase.
By switching, you can release money that could be used to pay off your home early, fund home improvements, or simply ease the pressure on your household budget.
The perks of switching will vary depending on your circumstances and goals, but remortgaging can help you:
How much could you save?
With mortgage rates in Ireland ranging from as low as 3.0%, the gap between the best and worst deals has never been wider.
If you’re paying more than 3.5% on your mortgage, or your fixed-rate term is ending soon, switching could cut your monthly repayments significantly.
Here’s some example savings based on a €200,000 remaining mortgage, with a current interest rate of 3.80%
| Scenario | Rate | Term (years) | Monthly payment | Total repayment | Total interest paid | Total saving over term |
|---|---|---|---|---|---|---|
| Current mortgage | 3.80% | 10 | €2,006 | €240,748 | €40,748 | - |
| Scenario 1: Better rate | 3.35% | 10 | €1,964 | €235,623 | €35,623 | €5,125 |
| Scenario 2: Best rate | 2.90% | 10 | €1,922 | €230,652 | €30,652 | €10,096 |
| Scenario 3: Shorter term | 3.20% | 8 | €2,364 | €226,979 | €26,979 | €13,769 |
What does it cost to switch your mortgage?
Fees vary depending on the lender and solicitor you use and if you stay with the same lender costs will be much lower.
Some lenders may charge an arrangement fee or other specific fees for buy to let or high-value transactions. This is also known as a booking fee or product fee.
Several Irish lenders offer cashback as an incentive to switch, which, in most cases, could help cover legal costs and any extra fees.
Here are some of the costs you may have to pay:
- Valuation fees: It usually costs around €150 to get a property valued and around €65 for a re-valuation
- Legal costs: Solicitors can typically charge between €1,500 and €3,000 to complete the legal work.
- Early repayment charge (ERC): If you end your fixed-rate term early, an ERC may be applied. Check the amount with your lender.
- Mortgage broker fees: Using a broker is optional, but if you do, they may charge.
Example savings
The value of your property is €300,000 and the remaining balance is €150,000 (50% LTV). You have 15 years remaining on your mortgage term and are currently paying an interest rate of 3.75%.
If you were to switch to a better mortgage deal at 2.9% with an APRC (Annual Percentage Rate of Charge) from 3.75%, you could make a potential saving of €744 per year and monthly savings of around €62. Over 15 years, this could mean a saving of €11,237.
With fees and charges of around €2,000 factored in to the calculation, you’ll still save over €9,000 over the lifetime of your remaining mortgage term.
Do lenders cover legal fees when you switch?
Several lenders offer cashback for switching, which can be used to cover legal fees.
Typically, you’ll get the cash paid into the account you use to pay your mortgage within 2 months.
Here’s what Irish lenders are offering at the moment:
| Mortgage lender | Switcher incentive | Conditions | |
|---|---|---|---|
| AIB | €3,000 cashback | Only applies to private/residential dwellings | |
| Bank of Ireland | Up to 3% cashback | 2% immediately and additional 1% after 5 years | |
| EBS | Up to 3% cashback | 2% immediately and additional 1% after 5 years | |
| Haven | Up to €5,000 cashback | mortgages over €250,000 but excluding the Green 4 year fixed | |
| PTSB | 2% cashback on drawdown plus 2% back in cash every month | Need to pay direct debit from PTSB Explore account |
Find Ireland’s best switcher deals and get a better rate.
How to switch your mortgage: Step by step
- Check if you can switch: Find out if you’re still in a fixed-rate period and whether an early redemption charge (ERC) applies. If you’re on a variable rate or your fixed term is ending within 60 days, you can switch penalty-free.
- Get your property valued: Arrange a valuation (around €150) or re-valuation (around €65) to determine your home’s current value. You’ll need this to calculate your loan-to-value (LTV) ratio – the key factor lenders use to determine your rate.
- Compare switcher deals: Use our mortgage comparison tool to find the best rates for your LTV. Look beyond just the interest rate – factor in cashback offers, which can range from 2% to €5,000 and often cover your switching costs entirely.
- Apply for approval in principle: Submit your application to the lender you have chosen. They’ll assess your income, credit history, and affordability. Most lenders must give you a decision within 10 business days of receiving a complete application.
- Get your legal work done: Appoint a solicitor to handle the legal transfer (typically €1,500-€3,000). You’ll also need to arrange mortgage protection insurance and buildings insurance if you don’t already have them.
- Drawdown and save: Once approved, your solicitor will coordinate the transfer of funds from your new lender to pay off your old mortgage. Your cashback (if applicable) will typically arrive within 2 months, and you’ll start saving on your monthly repayments immediately.
Timeline: The entire process typically takes 8-12 weeks from application to drawdown.
When should you switch?
It’s worth considering remortgaging when you’re reaching the end of your fixed-rate deal or have been on a variable rate for some time.
There are lots of things that affect when you should switch, but these are the main three factors to consider:
With a fixed rate mortgage, it’s best to wait until the end of your fixed period to avoid paying an early redemption charge (ERC). At the end of the fixed period, you’ll automatically switch over to the lender’s standard variable rate, but you can do the following penalty-free:
- Overpay your mortgage
- Switch your mortgage
- Redeem your mortgage
What’s your mortgage rate type?
The timing and benefits of switching will depend on whether you’re on a fixed or variable rate mortgage.
Here’s how the type of mortgage rate you’re on affects your switch.
Fixed rate
With a fixed rate mortgage, you may need to wait until the term ends to avoid an early redemption charge (ERC), which could outweigh any savings.
Your lender must let you know if they have any cheaper options 60 days before your fixed term ends.
Variable rate
If you’re on a variable rate, you can usually switch penalty free at any time, but there could still be fees involved in switching e.g. valuation fees.
Your lender should tell you if they have cheaper options available based on your loan to value (LTV).
Eligibility criteria for switching
Most Irish homeowners with an existing mortgage can switch lenders, but you’ll need to meet your new lender’s lending criteria just like you did with your first mortgage.
The good news is that if you’ve been keeping up with your repayments and have built up some equity in your home, you’re likely in a strong position.
However, if your financial circumstances have altered, for example, due to a change in your employment status, your application may take longer.
Lenders will assess eligibility by looking at your:
Not sure if you qualify? Speak to a mortgage broker or contact lenders directly before applying for your mortgage approval in principle – a formal application rejection can affect your credit score, but initial enquiries won’t.
What lenders must do to help you switch
Lenders have to follow the Central Bank of Ireland mortgage measures which require them to:
- Let you know about cheaper options 60 days before your fixed rate mortgage ends
- Inform you if you can switch to a cheaper mortgage based on your loan to value (LTV) and how much equity you have
- Explain clearly the pros and cons of mortgage incentives e.g. cashback offers
- Show you how much your mortgage costs compared to other options they offer if requested
- Give you all the information you need to switch, including how long it will take
- Let you know their decision within 10 business days of receiving your completed mortgage application
Moving home and switching
Moving house is the perfect opportunity to reassess your mortgage, but should you port your existing loan or switch to a new lender?
Porting
This is transferring your current mortgage to your new property, and is the simpler option.
On the plus side, you’ll keep your existing rate and terms, avoid early redemption charges if you’re in a fixed period, and the paperwork is more straightforward. However, you’re stuck with your current rate, which may not be competitive.
Switching
This gives you access to the best mortgage rates in the market and cashback deals that can offset your moving costs and product fees.
However, you’ll need to complete a full mortgage application process, which takes longer. It also results in higher fees, although some lenders offer up to €5,000 specifically for movers.
On balance, if your current rate is above 3.5% or your fixed term is ending anyway, switching while moving could save you thousands over your mortgage term.
Applying for a switcher mortgage
Once you have chosen your new lender and mortgage deal, get ready to:
- Submit your application. Here’s how to prepare for a mortgage application
- Produce any ID and documents the lender requires e.g. bank statements and payslips
- Wait for lender decision (they have 10 business days)
- Appoint a solicitor for conveyancing work
- Receive formal mortgage offer letter from new lender
- Return signed acceptance and any additional documents
- Wait for your solicitor to request title deeds from your current lender
- Arrange mortgage protection insurance and buildings insurance (if required) with your new lender
Once everything is in place, your solicitor will arrange for the transfer of funds between lenders and ensure your new mortgage is ready for you to draw down.
How to choose the best switcher deal
Here’s how to ensure you’re choosing the right mortgage deal for your needs.
Switching mortgages FAQs
How long does it take to switch my mortgage?
It varies depending on the lender and your individual circumstances, but you should allow around four to eight to 12 weeks.
Should I overpay my mortgage before switching?
Overpaying a large sum before you switch could positively affect the deals you can switch to as it will reduce your loan to value (LTV). If you opt to do this, make sure you look at deals with your new LTV.
If you’re switching to a variable rate mortgage, overpaying is very flexible so you can continue to overpay as and when you like.
With a fixed rate deal, you’re usually restricted to overpaying 10% of your balance a year penalty free, so overpaying before you switch is more important.
To find out more about overpaying and whether it’s right for you, read our guide: Should you overpay your mortgage?
Should you switch your tracker mortgage?
Tracker mortgages aren’t widely available as new products but if you already have one, some lenders offer a follow-on tracker mortgage if you’re moving home.
If you’re considering switching your tracker mortgage:
- get financial advice and discuss all your options
- compare your current rate with the ECB rate
- compare mortgage rates online to see how much you’ll save
- remember once you leave your tracker, you can’t go back
Can I still claim mortgage interest relief if I switch?
Yes. The temporary, mortgage interest tax credit (MITC) announced initially in last year’s Budget has been extended through 2025.
To qualify, you must be a homeowner with an outstanding mortgage balance between €80,000 and €500,000 with a qualifying lender as of 31 December 2022. In addition, the interest paid on your mortgage in 2024 needs to have increased from 2022.
For example, if your mortgage repayments totalled €13,000 in 2022 and increased to €16,800 in 2024, you can claim 20% tax relief on the €3,800 difference. That would mean a tax credit of €760.
Compare mortgage rates & deals
Find a range of first time buyer and home mover mortgage deals in Ireland using our comparison.
