Why switching a mortgage is different from switching energy
Switching your electricity provider takes 10 minutes and costs nothing. Switching your mortgage takes a few months and involves legal fees, a valuation, and some paperwork. The process is more involved, but the potential saving is also orders of magnitude larger.
For a €250,000 mortgage with 20 years remaining, moving from a 4.5% rate to a 3.5% rate saves roughly €130 per month. Over the life of the loan, that adds up to more than €30,000 in interest. That's worth a few hours of admin.
What does switching a mortgage involve?
Switching (also called remortgaging) means moving your existing home loan to a new lender who offers a lower interest rate, better terms, or both. Your home stays the same. Only the lender changes.
The new lender pays off your existing mortgage and takes over the loan. You then make repayments to the new lender at the new rate.
- Property valuation: the new lender needs to confirm the current value of your home. This typically costs €150 to €200.
- Solicitor fees: a solicitor handles the legal transfer of the mortgage. Expect to pay €1,000 to €1,500 including VAT and registration fees.
- Possible break fee: if you are on a fixed rate with your current lender, there may be a fee to exit early. This can range from a few hundred euro to several thousand depending on the lender and how far into your fixed term you are.
When is switching worth it?
A rough rule of thumb: if you can reduce your interest rate by 0.5% or more and you have at least 10 years left on your mortgage, switching is almost certainly worth investigating.
The key calculation is simple. How much will you save per month after switching, and how long will it take to recover the switching costs (valuation plus solicitor fees, minus any cashback)?
| Remaining balance | Rate reduction | Monthly saving | Break-even (est.) |
|---|---|---|---|
| €150,000 | 0.5% | ~€45/month | ~18 months |
| €250,000 | 0.5% | ~€75/month | ~12 months |
| €300,000 | 1.0% | ~€180/month | ~7 months |
The mortgage loyalty trap
Banks in Ireland, like energy companies, typically offer their best rates to new customers. Existing customers who don't actively shop around often end up on standard variable rates (SVRs) that are significantly higher than what new borrowers are being offered.
Irish SVRs have historically been among the highest in the eurozone. The difference between an SVR and a competitive fixed rate from another lender can be 1 to 2 percentage points, which is a significant cost on a large loan balance.
Competition for switchers has increased in recent years. Some lenders actively target mortgage switchers with preferential rates and cashback offers.
Fixed rate vs variable rate: which should you switch to?
Most switchers fix their rate for a period of 2, 3, 5, or 10 years. A fixed rate gives you certainty about your monthly repayment and protects you if rates rise.
Variable rates can work in your favour when rates fall, but they also mean your repayment can increase. In a falling rate environment, a short fixed term of 2 or 3 years gives you the option to review again sooner.
Green mortgage rates are available to homes with a BER of B3 or above and can offer a meaningful additional discount on top of already competitive rates.
How to switch your mortgage: step by step
- Step 1: Find out your current rate, remaining balance, and how much time is left on any fixed term. This is on your most recent mortgage statement.
- Step 2: Compare rates from other lenders. Use Sortd or check directly with AIB, Bank of Ireland, PTSB, Haven, EBS, and Avant Money.
- Step 3: Calculate the total saving versus the total cost of switching (valuation plus solicitor, minus cashback). If you break even in under 24 months, it's generally worth doing.
- Step 4: Apply with the new lender. They will request payslips, bank statements, and your property details. The process takes 4 to 8 weeks on average.
- Step 5: Instruct a solicitor to handle the legal transfer. Your new lender can usually recommend one.
- Step 6: Completion. Your new lender pays off the old mortgage, and you start making repayments at the new rate.
See your potential saving
Find out if you are overpaying
Sortd compares your current energy tariff against the full Irish market and shows you exactly how much you could save — based on your actual usage.
What if my home has dropped in value?
Your loan-to-value (LTV) ratio is what you owe divided by what the property is worth. Lower LTV means lower risk for the lender, which typically means access to better rates.
If your home has dropped in value since you bought it, your LTV will be higher. Some lenders have maximum LTV thresholds, such as only lending up to 80% LTV. It's worth checking which lenders will consider your situation before applying.
Key things to check before you switch
- Your current fixed-term end date. Switching before it ends may trigger a break fee.
- Any cashback tied to your existing mortgage. Some banks require repayment of cashback if you leave within a certain period.
- Your BER rating. If your home is B3 or above, you may qualify for a green mortgage rate.
- Your LTV. Divide your remaining balance by the current estimated market value of your home.