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The Ultimate remortgage and switch mortgage smart Q&A, Ireland 2021

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Make all the smart switch mortgage moves with our sherpa's smart ultimate Q&A. Answering all your mortgage switching and remortgaging questions.
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How to switch mortgage provider?

The simplest way to switch mortgage is to speak to a mortgage broker. Brokers fees are usually paid for by the lenders and many have exclusive access to lenders with the best rates. Avant Money, ICS and Finance Ireland have the lowest rates and are only available via brokers. 

What is mortgage switching?

Mortgage switching is taking out a new mortgage with a new lender, usually because the new lenders interest rate is lower and using that mortgage to pay off the old mortgage. The average saving on switching in Ireland is over €20,000, leading to increased numbers of switchers.

How much does it cost to switch mortgage providers?

It costs around €2,000 to switch mortgage. 

  1. A solicitor gathers the right paperwork and checks the terms of the new loan. The fees usually come in between €1,000 to €1,500 excluding VAT. 
  1. An estate agent values your home. So the bank can put you on the right rate and usually comes in at €150 excluding VAT.

How much are the legal fees to switch mortgage?

Legal fees to switch mortgage usually come in from €1,000 to €1,500. The solicitor has to request the deeds from your old bank and then handles the paperwork with your new bank. They will also make sure you understand the terms of the new loan before you sign the new loan agreement. 

Do I need a solicitor to change mortgage?

Yes, under law you need a solicitor to switch mortgage. The solicitor will transfer the deeds from your old lender to your new lender and to advise you on the terms of the new loan offer. Having a solicitor also gives you and your bank confidence in the paperwork. A mortgage broker will handle the solicitor for you.

How much to switch mortgage?

Average costs to switch mortgage are under €2,000 inc VAT to cover a solicitor and estate agent. If you shop around you should be able to find a mortgage broker who is fully paid for by the lender and will manage the solicitor and estate agent on your behalf. 

How long does it take to switch mortgage lenders?

It usually takes 6-12 weeks to switch mortgage lenders. Switching mortgage is pretty straightforward compared to buying a property first time round. 

First you need to pass your new lender’s credit check, this is usually pretty quick, as you already have evidence you are paying a mortgage with your old lender. 

Then you need to get a solicitor involved to handle the contract paperwork. Finally, a local estate agent selected by the new lender values the property. 

What is involved to switch mortgage provider?

There are 4 steps to switch mortgage provider.

  1. Find the best lender using an online calculator
  2. For credit approval you will need to prove who you say you are and provide evidence of your ability to repay the loan. To confirm you are on the right rate the new lender will also ask you to get your home professionally valued. 
  3. Now comes the legal bit, which is much simpler than when you buy. Your solicitor gets the paperwork sorted, checks you understand it and you sign. 
  4. Now for the money switch, drawdown. When all the boxes have been ticked your new lender will ask you to fill in a new direct debit to collect your repayments. 

How to switch mortgage provider? 

5 simple steps to switching your mortgage

Step 1 – Calculate your mortgage savings online

Step 2 – Find a mortgage broker fully paid for by the lenders 

Step 3 – Gather your paperwork, bank statements and salary certificates

Step 4 – Use your broker to manage the solicitor and estate agent

Step 5 – Enjoy your new mortgage savings every month

How easy is it to switch mortgage?

Using a mortgage broker can make the switch mortgage process very straightforward, they will handle all the paperwork for you. If you shop around you should be able to find a broker that is fully paid for by the lenders. Solicitors fees and Estate agent fees are also covered by some lenders. It takes 6-12 weeks to complete the switch from start to finish.

How do I switch mortgage lenders?

To switch mortgage or to remortgage you simply take out a new mortgage with a new lender and use that to pay off your old mortgage provider. Typically this is to avail of a lower mortgage rate with the new lender on the same mortgage amount or to increase the mortgage known as ‘topping up’ to release equity from your home. It makes sense to consult with a mortgage broker before switching.

How often can you switch your mortgage provider?

There’s no limit on how often you can switch your mortgage provider, even if you have received a cashback offer. 

If you are still in your fixed rate period you need to watch out for ‘breakage fees’. Under EU law the fee is capped in line with the cost to the lenders of providing the rate. This depends on the difference between the interest rate when you fixed and the interest when you switch. 

As a result, often there are no fees at all, but the only way to be sure is ask your bank what your fee would be.

How many times can you switch mortgage?

Under EU law there is no limit on how many times you can switch your mortgage. This also means that you can avail of multiple cashback offers. The best rates however are fixed rate mortgages which can have penalties if you switch within the fixed period. 

When can you switch mortgage?

You can switch mortgage for free if you are outside your fixed rate period, usually 3 or 5 years after you took out the loan. Even if you are in the fixed rate period you may be able to switch without penalty due to EU law. Ask your lender to calculate what ‘break out’ fee would apply in your particular case.  

Can you switch from a fixed rate mortgage?

You most certainly can switch from a fixed rate mortgage. A lot of people think this always incurs a fee, but due to an EU law banks can now only cover their costs with these fees. This means the fee the bank is allowed to charge depends on the difference between the rate when you fixed and the rate when you switch. You should ask your bank what fee would apply to you, more often than not it turns out there are no fees at all.

Can you switch mortgage if in negative equity?

If your loan is larger than the value of your property, switching can be tricky as the bank ‘backs’ the mortgage with the value of your house. It often makes sense to get an up to date valuation 

and then talk to an experienced mortgage broker about your options if you think you might be in negative equity.

How much will I save if I switch mortgage?

If you bought after 2008 you may be one of the 200,000 mortgage holders on rates of 4.2% APRC, meaning big savings if you switch mortgage. The average saving for these customers is around €20,000 over the duration of the mortgage. Even if you aren’t on a 4.2% rate, you will probably save thousands by switching. 

How does a mortgage calculator work?

The mortgage calculator uses the rate you can get. This usually depends on the size of the loan and the value of the property. A calculator selects the right rate for your particular loan to value and then applies this to work out the total cost of your repayments based on the length of mortgage you need.

How do you remortgage a house? 

To remortgage you take out a new mortgage with a new lender and use that to pay off your current lender. Usually to improve the rate or increase the mortgage amount. This known as mortgage switching in Ireland and remortgaging in the UK, but it is the same process. 

What is a remortgage?

A remortgage is a new mortgage on a property already with a mortgage. Usually that new mortgage is used to pay off the previous mortgage. Often the new mortgage is at a lower rate reducing the repayments and saving money for the mortgage holder. In Ireland this is often known as switching mortgage.

Why remortgage?

There are two main reasons why people remortgage or switch their mortgage.

  1. To reduce your repayments and save money. New customer rates in Ireland are almost half existing customer rates, so remortgaging can save mortgage holders significant amounts in interest payments
  2. To release equity tied up in your home. To allow investment or major purchases at mortgage interest rates which are lower than other types of loans.

Sources and next steps

You can calculate your own switching savings here or arrange a free no obligation consultation here.

You can read more about switching your mortgage and how much you could save here.

Information based on data from the CCPC, BPFI, CSO, MABS, Central Bank of Ireland.

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Angie O'Hara - mortgage sherpa lead

Need help with your mortgage?

No hassle, in a 15 minute call our mortgage sherpa team will guide you on the journey. 

They will help you borrow, find you the best deal and make the paperwork painless.

Best of all, they are free as they are paid for by the lenders.

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mortgage broker cork
Angie O'Hara - mortgage sherpa lead

Need help with your mortgage?

No hassle, in a 15 minute call our mortgage sherpa team will guide you on the journey. 

They will help you borrow, find you the best deal and make the paperwork painless.

Best of all, they are free as they are paid for by the lenders.

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