Irish mortgage holders should be looking to switch now – with rates set to surge in the coming years, according to Daft.ie.

A new survey by Daftmortgages.ie suggests 87% of mortgage holders will start saving immediately if they switch mortgages now.

Meanwhile, 96% of people will save over the coming years if they lock in their current fixed rates.

Despite this, just 1% are likely to try and switch this year.

According to Daft analysis, mortgage holders will save an average of just over €8,900 over the next four years by switching and fixing interest rates now.

On Newstalk Breakfast this morning, Daftmortgages.ie General Manager Paul Monahan said there are three main reasons people are reluctant to switch – they are worried about break fees, they don’t think they will save or they don’t want to make the effort.

He said Ireland’s mortgage rates are currently “at the bottom of a U” – meaning there is no better time to lock down a rate.

“They have been falling for around 10 years and we reached the bottom of the ‘U’ this summer,” he said. “Some lenders have started to increase their rates, but the main one haven’t yet.

“From the bottom of the ‘U,’ we’re facing into an upwards slope now and interest rate rises are coming.

“It’s quite possible that mortgage holders might face 4.5% or so in a few years as opposed to maybe 2.5% today.”

Switch

Mr Monaghan said very few mortgage holders are subject to break fees when they switch or refix – even if they are on fixed-rate loans.

“Call your current lender and you can ask for your break fee,” he said. “It will be zero in most cases.”

He said the research suggests that 87% of customers will save by switching.

“If you don’t know if you will save or not, you can, kind of, take it as a given that you will and act on that basis,” he said.

Effort

He said he understands people who are worried about the time and effort it takes to switch – but noted that the survey showed that 92% of those who take the plunge say it was worth it for the savings.

“Customers who have switched said it was worth the effort but here is some effort and cost involved,” he said.

“To people who are maybe put off by switching, I would say there is a lower effort option which is to fix or refix with your current lender.

“It probably won’t be the best available rate and you are not going to maximise your savings but it is quick and it is easy and it is still a good move that caps your mortgage repayments.”

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