Homeowners Urged to Act Now to Avoid Mortgage Hikes

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Holders of variable or fixed rate mortgages with less than two years to run must act now to avoid tough repayment hikes, experts have warned.

They say people who roll out historically low fixed-term contracts over the next few years will face immediate rate increases of more than 1%.

Homeowners pay an average of £4,595 in extra mortgage repayments a year by not switching lenders, according to the second quarter doddl.ie Mortgage Switching Index.

That’s almost 500 euros more than 12 months ago, he said.

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Martina Hennessy, Mortgage Transfer Expert, Managing Director of doddl.ie. Photo by Conor McCabe Photography.

Martina Hennessy, Mortgage Transfer Expert, Managing Director of doddl.ie. Photo by Conor McCabe Photography.

This figure rises to 4,678 euros if your property is rated B3+ and you are eligible for the Green tariff, with the introduction of a market-leading fixed rate of 1.9%.

The index is based on the average mortgage taken for new loans in the first-time buyers and second-hand movers markets, currently €284,903.

Mortgage switching activity has increased, with approval volumes increasing 153% year-over-year and the number of mortgage switchings has now doubled compared to four years ago.

Martina Hennessy, chief executive of doddl.ie, said: “There are two certainties: we are in a period of sustained rate hikes and the anchor banks, which have some of the highest rates in the market, will soon implement rate increases.

“The vast majority of mortgage holders will not have felt the effects of recent hikes, as is the case with AIB, Bank of Ireland or Permanent TSB, which have not changed their rates.

“If you’re on a variable rate, unless you plan to pay it off in the immediate short term, you need to act now and lock in your rate to avoid impending rate increases.

“Even a phone call to your bank will save you 1% immediately, and several percentage points a year later.

“The only people who go up will not be immediately affected are those on medium-term fixed rates.

Don’t wait until next year – now is the time to review your mortgage to lock in your next fixed rate rather than waiting for your rate to expireMartina Hennessy, doddl.ie

“For people who are just one year old, the next year will be a big concern as they come out of a historically low rate and affordability could become an issue in light of the overall increases in the cost of living. .

“Our advice would be not to wait until next year – now is the time to review your mortgage to lock in your next fixed rate rather than wait for your rate to expire.

“Our advice is to stick with five- or seven-year fixed rates and not jump to the first rate offered. Get advice from a broker and you’ll save thousands of dollars in refunds.

“Rising interest rates are also going to have a major impact on new mortgage applicants, as the higher the rate, the more negative impact there is on affordability. which reduces the amount applicants can borrow.

Ms Hennessy said banks need to consider their own service levels when announcing and imposing rate hikes, as many are routinely outside the Central Bank’s response time for switching applications .

“Banks must give due consideration to ongoing applications when implementing rate increases to be fair to customers working through an application process that is delayed due to banks’ own service levels.” she added.

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