Switching mortgage provider could save you thousands of euro a year – so why do so few people consider it?

New research from the Banking & Payments Federation Ireland (BPFI) finds that only 28% of homeowners have considered switching in the past year.

Meanwhile, just a third (34%) have looked at mortgage products in the past six months.

On Breakfast Business with Joe Lynam, BPFI CEO Brian Hayes said many people have no idea they could save such a large sum by switching.

“There is an issue around inertia,” he said. 

“People at one level, questioning whether they get any benefit from spending the time. 

“You do need to sit down, realise what interest rate you’re on [and] look at other providers in the market to make sure you’re getting the best rate and to make sure that the products that you’re switching to, is of benefit to.” 

Construction cranes in Dublin. Photo: Sasko Lazarov/© RollingNews.ie

Analysis published in April by the Central Bank of Ireland found that people who switched between 2019 and 2022 saved on average €2,000 a year. 

The BPFI has launched a new website, InYourInterest.ie, to help people who are considering switching. 

“Our responsibility as an industry - because we do support competition - [is to] get that message out there,” Mr Hayes said. 

“Particularly, in an interest rate environment that seems to be changing at the moment. 

“The cycle has turned; we’ve already seen two reductions from the European Central Bank this year.” 

Mr Hayes predicted that further interest rate reductions will likely “continue over the next two years as inflation has been curtailed somewhat by the ECB.” 

Homeownership

Despite the cuts in interest rates, the cost of homeownership remains high.

Data published last month by property advisors DNG found the price of a home in Dublin rose 8% between September 2023 and September this year. 

Since 2012, the average price of a home in the capital has skyrocketed by 135%.

Nationwide, the CSO has calculated property prices have risen by 10.1% in the 12 months to August.

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Main image: Euro banknotes. Picture by: Roman Diachkin / Alamy