New information available from the property price register indicates that Galway mortgage holders could save over €400 million by switching their mortgages to lower rates. In fact over 12,000 mortgage holders in county Galway who bought after 2008 stand to save over €25,000 each by switching their mortgage.
The potential for large savings is driven by the wider than ever gap between existing and new business mortgage rates, giving record savings for switchers in the county right now.
Mortgage switcher rate savings
To compare different mortgage rates you should use the Annual Percentage Rate Change (APRC) rather than the headline rates according to the Consumer Protection Commission. The APRC includes hidden fees and the full cost of the mortgage, so gives a much better picture of real savings.
The average APRC for those who bought after 2008 is 4.2%, according to the Central Bank of Ireland [1], but new business APRC rates are now as low as 2.29%, that’s 1.91% lower according to the mortgage rate review on the money guide site moneysherpa.ie,.
This means mortgage holders can almost halve their rate by switching.
One thing to watch out for though, before 2008 mortgage holders are likely to be on a tracker mortgage. These mortgages have an APRC of around 1%, so it is unlikely you will save if you bought before then.
How many Galway mortgage switchers will save?
According to the property price register [2] over two thousand houses are sold in county Galway every year. Since 2008 over 24,000 homes have been sold in the county.
Half of those sales are funded with a mortgage, according to the Central Bank, this means there are around 12,000 Galway mortgage holders who should save by switching.
How much is the average saving for mortgages?
According to the Banking and Payments Federation Ireland (BPFI) [3], switchers have an average mortgage of €242,000 and 15 years of payments left. Based on currently available new business rates, Galway mortgage holders could save over €25,000 each and upto €75m in total if they switched right away.
How do Galway mortgage holders switch?
The good news is switching isn’t complicated and is usually free according to Daire McConnon of moneysherpa.
“Lenders are very keen for new business at the moment, so most cover any costs involved. The process is also much simpler than getting a new mortgage as you already have proven you can repay your existing mortgage.”
“If you get a broker or switching service to help you, they will handle all the paperwork and they are paid for by the lenders so are free to use.”
In a nutshell – switcher savings
The fall in new business mortgage rates has made it attractive for the people to switch their mortgage. There are over 12,000 Galway mortgage holders who bought after 2008 will make big savings by switching.
Switching isn’t complicated and a local broker can help you switch by handling the paperwork for you.
You can book a free mortgage advice call with one of the moneysherpa team here.
Founder of moneysherpa.ie, Mark Coan heads a team of experienced finance and technology experts, helping consumers make smarter personal finance choices.
