Less than a third of mortgage customers have considered switching lender. Only 34 per cent have looked for information on mortgage rates available in the past six months, while only 27 per cent have researched mortgage products available in the market.
The Banking and Payments Federation figures come as mortgage customers are urged to look at their switching options.
New research published today by BPFI shows that less than a third (28%) of mortgage customers have considered switching in the past year, only about one in three (34%) have looked for information on mortgage rates available in the past six months, while only 27% have researched mortgage products available in the market.
The findings further show that many customers are not aware of information which can be important when comparing rates, with 28% of mortgage customers saying they don’t know the current loan-to-value (LTV) ratio on their mortgage and a further one in four (25%) saying they don’t know their home’s BER or building energy rating.
The BPFI, in conjunction with BPFI mortgage lending members, is to roll out a major nationwide information/awareness campaign which aims to encourage customers to look at their switching options.
BPFI mortgage lending members have introduced a new standardised salary certificate for mortgage applicants, meaning that anyone applying for a mortgage will only need one certificate completed by their employer, helping to streamline the application process for customers.
Speaking on the launch of the industry-backed campaign Brian Hayes Chief Executive of BPFI said: “As we move into what looks likely to be a changing interest rate environment, BPFI and our members are today launching this campaign to raise awareness about the choices available for mortgage customers and to make it easier to find information about the switching process.”
“And while switching may not be an option for everyone due to a variety of circumstances, according to our research published today, with about one in five (21%) mortgage customers saying they are on a variable rate mortgage and a further 11% saying they are due to come off a fixed rate within the next year, it is really important for consumers to inform themselves of what options are open to them.”
He added: “There are a variety of reasons why more people may not have considered mortgage switching, with the main reason being uncertainty about the steps involved, according to a recent ESRI report, as well as uncertainty about the costs and benefits and the fear of making a mistake. Through our new website, InYourInterest.ie, we hope to help mortgage customers get started on the process more easily, by answering common questions about how the switching process works so they can start shopping around and see if there is a better product or rate available to them.”
Mr Hayes continued: “While switching mortgages can take time, it can result in significant savings for customers’ monthly repayments through lower interest rates offered by another lender or through a different product from their current lender. In fact, analysis by the Central Bank of Ireland shows that mortgage customers who switched between 2019 and 2022 saved an average of €2,000 per year. Moreover, some customers may not be aware that since they first took out their mortgage, factors such as a decrease in the loan-to-value (LTV) ratio of their property or an improved Building Energy Rating (BER) could also impact the savings that can be made through switching.”
“Today we are encouraging mortgage customers to take the first step in reviewing their current mortgage and assessing their options, be that by looking up our new website InYourInterest.ie or talking to a lender, broker or other independent financial advisor. For most consumers their mortgage is their biggest financial commitment and equipping themselves to review that on a regular and ongoing basis could reap significant financial benefits.”
For more information on mortgage switching and the steps involved, visit www.inyourinterest.ie.
