Switching your mortgage: What you need to know

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A Comprehensive Guide to the Process, Eligibility, and Cost Analysis of switching your mortgage.

In the realm of homeownership, considering a mortgage switch can be a strategic move towards financial optimization. However, before delving into the process, it’s crucial to understand the eligibility criteria and associated costs. In this guide, we’ll navigate through what you need to know about switching your mortgage, shedding light on the criteria, the process, and the financial aspects involved.


Eligibility Criteria for Mortgage Switching:

Are you eligible for a mortgage switch? The answer lies in meeting specific criteria, which varies depending on the chosen bank. Primarily, your financial situation should not have deteriorated since your initial mortgage approval. Typically, there needs to be approximately €40,000 to €50,000 remaining on your existing mortgage for a lender to consider your application to switch.


A recent report from the Banking and Payments Federation of Ireland highlights a surge in switching activity, growing by 36.6% year on year. In the 12 months ending September 2021, almost 7,000 switcher mortgages were approved, marking the highest annualised level on record. This surge indicates a trend of homeowners leveraging lockdown periods to explore better mortgage deals.


Why Switching is Less Stressful, Easier, and Cost-Effective:

Switching your mortgage offers a host of advantages, making it a less stressful, easier, and more cost-effective alternative to buying a new home. Unlike purchasing a new property, there are no land registry or search fees associated with a mortgage switch. While you will need a solicitor to handle certain paperwork, the legal fees for switching are considerably lower and cover essential tasks:

  • Requesting your house deeds from your current bank on behalf of the new bank.
  • Reviewing and advising you on the terms of the loan offered by the new bank.
  • Witnessing and processing the loan agreement for the new bank.


Apart from legal fees, the primary cost involved in mortgage switching is the valuation fee. An estate agent, chosen by the bank, evaluates your home to ensure you are on the appropriate mortgage rate.


Cost Breakdown of Mortgage Switching:

Understanding the costs involved in mortgage switching is vital for informed decision-making. Legal fees for a mortgage switch typically range from €1,200 to €1,500, excluding VAT at 23%. This is a routine legal exercise and is considerably more straightforward than the initial home purchase process.


Additionally, the valuation fee, conducted by a bank-selected estate agent, is approximately €150. With a bit of diligent shopping around, the all-inclusive costs for mortgage switching should comfortably stay below the €2,000 mark, including VAT.



Ready to explore the benefits of mortgage switching? Contact us today with any mortgage queries, and our expert mortgage advisors are here to guide you through the process. Unlock the potential for better terms, reduced stress, and financial savings by making an informed decision about switching your mortgage. Your path to a more optimised homeownership experience begins with understanding the process and costs involved – take the first step today. Contact our team today and we will be delighted to assist you.

Contact us today with any mortgage queries and our expert mortgage advisors are here to help.

Source: Irish Times

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