It’s now easier than ever before to switch your Mortgage…

It’s now easier than ever before to switch your Mortgage…

Irish Mortgages

Financial Broker

As of the 1st of January 2019, new and enhanced consumer protection requirements are now in effect.

These changes were introduced due to research carried out by the Central Bank (CB) from 2015 onward. The CB analysed over half a million mortgages and results showed that up to 21% of borrowers could save money by switching. Furthermore, the data suggested that approximately 16,000 could save over €1,000 in the first year, and around 27,000 switchers have the potential to save in excess of €10,000 over the lifetime of their mortgage.

Subsequently, in 2017 the Central Bank expressed the need for greater transparency regarding information for consumers and the potential savings they could make by switching providers.

Therefore, six new measures have been introduced by the Central Bank for lenders. These measures are as follows:
  1. Consumers who have a fixed-rate mortgage will need to be informed about any cheaper mortgage options available. This needs to be completed 60 days before your fixed term is due to end.
  2. Consumers who have a variable-rate mortgage (other than a tracker rate) will need to be told at least once a year if you can switch mortgages for a cheaper rate. This is result of a move in the Loan to Value interest rate band and it is subject to the provision of an up-to-date valuation of your home. Other requirements may apply which your Financial Advisor can explain in detail.
  3. Your lender must clearly outline the pros and cons of any mortgage incentives in place such as any cashback offers.
  4. Your mortgage provider must give you a comparison between how much your mortgage costs versus other options offered by your lender.
  5. Your lender must acknowledge receipt of a completed mortgage application within 3 business days and make a decision within 10 business days following receipt of all required information for assessment of a mortgage application.
  6. If requested by the consumer, the lender must provide a mortgage switching guide, including prescribed information; application forms; and information on timelines, mortgage process and documents required from the consumer.

Basically, these new measures will help mortgage holders to understand when and if they should switch throughout the duration of their mortgage loan. If the consumer decides they would prefer a new alternative, then the switching process will be easier due to the new measures in place.

Gráinne McEvoy, Director of Consumer Protection expressed her views on the new requirements stating:

“While information to help consumers compare mortgage rates is widely available, our research also shows that some of the reasons people don’t switch their mortgage is because they don’t realise how much money they could save and also find it difficult to compare mortgages. These changes are aimed at making it easier for consumers to obtain this key information so that they are able to easily identify whether they are able to make savings by switching their mortgage, and make the process quicker and easier to complete if they do decide to switch.” 

Mortgages Advice

If you are looking for advice on your mortgage, our team of experienced financial advisors in Murray & Spelman (Financial Services) Ltd can help by providing clear and friendly advice to ensure you get the most competitive and suitable mortgage available.

Request a callback today!

Information Source: The Central Bank Website.