Irish homeowners could be missing out on a cashback offer of €1,500 on their mortgage. With mortgage rates at an all-time high in the Irish market, the current highest mortgage rates are now double the lowest.
However, there are ways for people to bring down their payments or to access lower rates. Mortgage expert Martina Hennessy, Managing Director of doddl.ie, explained that the ability to switch mortgages is always an option, with five lenders offering switcher incentive packages and reduced document requirements for switcher applicants.
She stated that there are cashback offers ranging from €1,500 right up to 2% of your mortgage back in cash.
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The lowest rate on the market is now available with a €3,000 cash offer. This provides a positive incentive for smart mortgage holders to seek out lower rates to reduce, what is for most, their largest financial commitment.
According to the Q1 doddl.ie Mortgage Switching Index, some homeowners could be overpaying a record average €7,812 more annually by sticking with their current lender, which is an increase from €3,587 a year ago, reports RSVP Live.
The Index is based on the average new mortgage drawn down in the last quarter of €309,502 and a highest roll out variable rate of 7.15pc versus the lowest standard rate on the market currently 3.6pc.
This has resulted in a staggering 42pc difference between the lowest 25-year monthly repayments of €1,566 and some homeowners forking out €2,217 at the highest end.
Those eligible for Green rates could pocket an extra €300 yearly, with the market’s lowest starting from 3.45pc that’s a hefty potential saving of €8,113 annually per the index.
The latest stats reveal a sharp decline in switcher activity in the first quarter plummeting by more than 50pc from Q1 2023.
Martina commented: “The expectation that disinflation would lead to rate decreases meant that many mortgage holders chose to hold on to variable rates in Q1 until rates dropped.”
“However, in the last six weeks we have seen rate decreases from six lenders as the impact of reduced funding costs starts to positively impact pricing.”
“Non-bank lenders ICS, Finance Ireland and MoCo have not yet reduced rates. These lenders are reliant on markets for their financing, so we should see them also pass on reduced costs of funding.”
For those currently coming off fixed rates, the big question is whether to expect further rate drops.
The recent cuts have injected some competition into the market, with the main pillar banks zeroing in on the Green mortgage space, where rates kick off at 3.45pc.
Green personal loans saw a surge, jumping over 90pc in 2023, the latest figures show.
“If you have carried out home improvements which positively impact the building energy rating of your home then you could be eligible for a much lower rate on your mortgage by switching,” said Martina. Tracker mortgage holders whose rate is directly linked to the ECB refinancing rate can be very hopeful of cuts to their mortgage rate this year with market analysts believing that we could see rate decreases from next month.
The vast majority of Irish mortgage holders who do not have tracker rates, will see their rate influenced by the funding mix and pricing policy of the Irish lenders and not directly by the ECB.
Martina shared: “No-one wants to pay more than they need to on their mortgage and so the question of further rate decreases is a very relevant one.”
“Most mortgage holders do not want to speculate when it comes to their mortgage, they like to lock in certainty.”
“Recent rate decreases have brought us competitive rates at sub-3.5pc. While these are not at the sub 2pc level of 2022 it would take extraordinary economic circumstances to see them fall back to similar levels.”
“For those holding out for their current lender to drop rates, I would suggest that they review the market for the best rate they can achieve now.”
“Don’t just accept the rate your current lender has to offer, if it makes sense to switch, then act now.”
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