How homeowners can save €7,000 a year as switcher savings double in just six months

The savings that homeowners can make by switching their mortgages have doubled in the past six months, the Q3 mortgage switching index has found.

As mortgage interest rates breach the 7% barrier for the first time in over a decade, householders may be paying a record average of up to €7,099 in extra repayments per year by not switching lenders.

This compares to €3,587 at the end of Q1 this year as rising funding costs filter down through the pillar banks and non-bank lenders.

The Index is based on the average new mortgage drawn down in the last quarter of almost €300,631 and a highest roll out variable rate of 7.15pc following Finance Ireland’s latest announcement, versus the lowest standard rate on the market – currently 3.85pc.

The gap between the highest and lowest rate on the market is now 3.3pc – this is the highest potential savings that the index has recorded of €591.80 per month, compared to €298.97 at the end of Q1.

And there are even cheaper rates available for those eligible for Green rates or who have lower loan to values.

However, despite the financial attractions, mortgage switching activity has decreased dramatically in 2023 as confusion reigns in the market, according to Martina Hennessy, Managing Director of

“People fear that they have missed the mythical boat, but the reality is that the repayment gap is widening, and it is now more important than ever to review your mortgage rate,” said Ms Hennessy.

“Fear of selecting the wrong options means that we do not act at all, and remain paying needlessly high rates of interest on our biggest outgoing.

“While the pillar banks were initially slow to pass on rate increases this has certainly changed and we continue to see rate increases throughout the market.

“The non-bank lenders who were immediately impacted by rising funding costs have more than doubled their rates in less than two years”.

“The last time we had this higher-rate environment, between 2006-2008, people couldn’t switch, as loans to values were dropping. We are in the opposite place now and the homeowner’s hand is very strong.

Due to property price inflation most mortgage holders rolling off fixed rates will have an improved loan to value and will be eligible for lower rates due to their stronger position.

“With normal payback and in an increase in house values, even mortgage homeowners who purchased three years ago at 90% loan to value may be below the 60% threshold now and be eligible for sub 4pc rates,” said Ms Hennessy.

“The significant fall in switching volumes at a time when the potential savings have never been greater is something that needs to be addressed.

“It is so important that mortgage holders question what interest rates are available on the market and not just settle for the rate offered by their existing bank.

“You will only ever switch your mortgage if there is a financial benefit to do so, understanding whether it does make sense is something most people need to get advice on.

“The majority of those switching mortgage do so with the assistance of a mortgage broker.

“A ten-minute sense check on rate could end up saving you thousands annually on, what is for most, their largest financial commitment.”

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