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Switching your Mortgage

Should Ya!, Could Ya! Would Ya!

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There is a lot of noise around at the minute about switching your mortgage to a different lender.
So, let’s look at Should, Could & Would you switch providers.

Should Ya!

Long answer short. Yes, if you are paying more than you should. That is, if your interest rate is higher than what is available for other providers. Always get advice though from someone who is not tied to any one lender, before switching your mortgage. While some offers look great, you need to know the full picture.
You need to know exactly what is being offered, the pro’s and the con’s. Your existing provider might offer a better rate than you are currently on as well, so check with them.

Is it always a good idea to switch?

No! not in all cases
Whilst the interest rate is a good starting point to consider whether to switch or not it is not the only factor to consider. If you are on a Tracker rate with your current provider for instance, you need to consider the implications of switching, the new provider will not give you a tracker rate. Caution is needed here, and advice is very important.
Your individual circumstances also has a bearing of whether you should switch your mortgage or not. 
Things like:

  • Your Age
  • How long your mortgage has to run
  • Your plans for the property in question
    So, the “Should Ya!” reason to switch, in the first instance, is to save money.

*Example
This is an actual case we looked at this week. (Obviously, names have been changed)
Bill & Mary, have a mortgage balance of €175,000 with 23 years to run, current interest rate is 3.15%, they are paying they are paying €892 monthly, there is a rate 2.3% available to them, the repayment would be €817 monthly, a saving of €75 monthly. It could be argued this would represent a saving of €20,700 over the remaining 23 years.

If you enjoy overpaying for everyday items, then, you should not switch providers. Remember your mortgage is an everyday item. That is, you think about it almost everyday…..

Could Ya!

Now this is where it gets interesting. Not everybody that should switch will be able too. The process of switching mortgage providers is almost the same as applying for new mortgage, whilst, the terms and condition of a new application are not exactly the same as a swither application allot of the lending criteria is the same.
So, things like

  • Your Age
  • Your employment or self-employment
  • Your income
  • Your credit history
  • The value of your property versus the outstanding balance of your mortgage

All have a bearing on whether switching is an option for you or not.
The only way to really know if “Could Ya!” is an option is to talk to some one that can help you figure it out.   Give us a call 074 910 3938
If the property in question is not your principle private residence than switching providers may not be an option.

Would Ya!

That is, would ya be bothered. The hassle of it all.
A question for you.
If you had a hole is your pocket and you were losing, let’s say, €55.23 per month out of this hole. Would stop using the pocket or get it mended or continue to use it and  conitinue to lose money? I think not....
So what continue to lose money withyour mortgage repayments

We suggest that a little hassle is worth enduring, if, savings can be made and importantly, it was the right decision after taking advice. Why continue to pay more than you need to.  

We are happy to help you through the processs, to make it easier.

What about the cost of switching?

A few lenders, not all, are offering “Cash Back”. This will help cover the initial outlay of moving to a new provider. Again, advice is needed as not all Cash Back offers are the same and not all offer long term value for money.

Take Action

Our advice is to get advice to help you to:

  1. Educate yourself of whether switching is an option for you or not.
  2. Look at the pro’s & con’s of switching or not

If you want help, we are happy to advice.

Call us today 074 910 3938  Email us

 

*example above is based on a mortgage of €175,000, term 23 years, rate variable 3.15%, switching to a 2-year fixed rate of 2.3%.

Warning: If you do not keep up your repayments you may lose your home

Warning: You may have to pay charges if you pay off a fixed-rate loan early.

 Warning: The cost of your monthly repayments may increase.

Warning: If you do not meet the repayments on your loan, your account will go into arrears. 

Advice First Financial Services Ltd trading as Advice First Financial is regulated by the Central Bank of Ireland.

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