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When Is The Best Time To Switch Mortgages?
As a homeowner, figuring out the best time to switch mortgages can save you thousands over the term of your loan. But when exactly is the best time to switch?
Getting the timing right takes careful consideration. In this article, we discover all you need to know about finding the ideal moment to make your move.
The benefits of switching mortgages
Before discussing when to switch your mortgage provider, let’s first examine why it’s a good idea.
The key benefits of making the switch are hard to ignore, from securing a lower interest rate and reducing monthly payments to accessing better terms and conditions.
All these advantages add up to make a significant difference to your savings pot.
In fact, the latest figures show that mortgage holders could save close to €7,505 per year, simply by switching their mortgage.
With the potential to shave such a substantial sum off your yearly outgoings, it’s no surprise that switching activity rose by 27% in July of this year.
Savvy homeowners are quickly catching on to the benefits of making the switch, and with lenders now in fierce competition to attract movers, there’s never been a better time to consider changing things up.
Choosing the best time to switch mortgages
If you’re confused about when and how to go about switching providers, there are several milestones to be mindful of, which can help you make your decision.
1. When your fixed rate is about to expire
One of the most suitable times to switch is when your fixed-rate period is coming to an end.
Once that rate ends, your lender will usually move you onto a higher standard variable rate, which could add hundreds of euros to your annual repayments.
Top tip: Given that it can take at least six weeks to finalise a new mortgage deal, it’s important to start exploring your options in the months before your fixed rate ends. This will give you ample time to compare offers and complete the switch before the new rate increase comes into effect.
2. When you want to improve your mortgage terms
Switching isn’t always about chasing the lowest rate. Many homeowners choose to make the move purely to improve the terms and conditions of their current loan. Switching for these reasons can help you:
- Shorten your mortgage term to pay off your home faster.
- Switch from a variable to a fixed rate for payment stability.
- Access features such as overpayment options or flexible repayment terms.
- Reap the benefits of cashback offers from a new lender.
Top tip: If your financial situation has changed – for example, if your income has increased, or you want more control over your repayments, switching can help you alter your mortgage to suit your revised financial goals.
3. When there has been a drop in interest rates
Mortgage rates can shift over time, and what seemed like a good deal a few years ago may now be far less competitive.
This rings particularly true at this present moment in time, with certain lenders cutting their mortgage interest rates in recent months.
If you find that multiple lenders are now offering lower fixed or variable rates than you are currently on, switching now could significantly reduce your monthly repayments.
Top tip: A cut in your interest rate that’s as little as 0.5% can still save you thousands over the lifetime of your loan, so make sure to keep an eye on market movements to reap maximum benefits.
4. When the value of your property has increased
If your home has risen in value, your loan-to-value ratio (LTV) may have improved. This means you’re borrowing a smaller percentage of your property’s value, which often qualifies you for lower interest rates.
For example, if your LTV has moved from 90% to 70%, lenders may offer you better terms as your loan is now seen as lower risk.
Top tip: Carrying out a property valuation is the best way to determine your current LTV, and this will inform whether or not it’s a good time to capitalise on an increase in value.
What to consider before making the switch
While switching mortgages can be a smart financial move, it’s important to weigh up both pros and cons.
Some of the downsides associated with switching include:
Break fees
If you’re currently on a fixed rate, you may face an early exit charge.
Legal and valuation costs
Expect legal fees of up to €1,500 and a valuation fee of approximately €200.
Term changes
Lower monthly repayments can be attractive, but extending your term may increase the total interest you pay, so it’s vital to work this out before pulling out of your existing loan arrangement.
Paperwork and eligibility
Lenders will pore over your income, credit record and LTV to assess eligibility for switching, so having your documents ready can speed up the process.
At Symmetry Financial Management, our team will review all these factors with you to make sure switching makes sense for your individual situation.
Assess the best time to switch mortgages with our help
The best time to switch mortgages is when you stand to gain the most, and when the numbers stack up in your favour.
Ultimately, the right time will depend on your personal goals and financial circumstances, and that’s where our team can help.
How Symmetry pinpoints the best time to switch mortgages
Switching your mortgage can be straightforward with the right support.
At Symmetry Financial, we analyse your current loan, compare the latest offers, and manage the entire process for you through our switcher mortgages service.
We work with all major Irish lenders and will only recommend a switch if it genuinely benefits you.
Ready to find out if now is the right time to switch?
Get in touch with our mortgage team today for a free, no-obligation consultation and get the ball rolling on big savings.
If you’d like a free, no-obligation consultation for your mortgage, pension or financial needs, get in touch here, call us on 01 6831673 or email us directly on info@symmetryfinancial.ie.
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