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Over 100,000 Irish mortgage holders could make huge savings 'by switching lenders or changing product'

Irish Mirror logoIrish Mirror 14/05/2019 Emma McMenamy

Over 100,000 mortgage holders could be making huge savings if they switched lenders or changed to a different product with their existing provider, it has been claimed.

According to Fianna Fail Finance spokesman, Michael McGrath, a huge proportion of home owners are paying over the odds on monthly repayments.

He said he made the discovery following contributions from Bank of Ireland, AIB, Permanent TSB and Ulster Bank, before the Oireachtas Finance Committee in recent weeks.

He said, for example, that a staggering 35,000 mortgage holders with Permanent TSB are still paying the standard variable rate of 4.5% despite being able to avail of a lower one.

“Following the four separate meetings held with these banks, I believe that over 100,000 mortgage holders could avail of a lower interest rate and thereby reduce their monthly repayments by switching to a different mortgage product with their bank or even by submitting an up-to-date valuation of their home to their lender.

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“For example, almost 35,000 mortgage holders with Permanent TSB are still paying a very high standard variable rate of 4.5%.

“All of these customers could reduce their rate by submitting an up-to-date valuation of their home and moving to a Managed Variable Rate.”

He continued: “Bank of Ireland has some 47,000 mortgage holders on a variable rate of between 3.9% and 4.5%. All of these customers have the option of moving to a 1-year or 2-year fixed rate of 2.9% today.

“Others can avail of a reduced rate by moving to a lower loan-to-value bank in line with their home valuation.

“Some 17,000 Ulster Bank customers are still paying a variable rate of between 3.5% and 4.3%, with approximately 10,000 of them paying a very high rate of 4.3%.

“Almost all of these customers would qualify for the bank’s 2-year fixed rate of 2.3% and all can avail of some rate reduction.

“And 59% of AIB’s mortgage customers are on a variable rate of between 2.75% and 3.15%, and many of them have not submitted a revised valuation of their home to improve their interest rate despite being written to by the bank outlining their options to them.”

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Mr McGrath said that people should shop around in order to get the best deal on their mortgage.

He concluded: “In essence, it is very apparent that many mortgage holders are paying a higher rate than they need to.

“I would encourage all mortgage holders to check what rate they are paying and to enquire with their bank if a lower rate is available to them.

“If it is not, they should look to switching their mortgage and availing of a lower rate elsewhere. People should not underestimate the savings that can be achieved.

“A rate reduction of 0.5% on a €200,000 mortgage would save a mortgage holder in the region of €1,000 in a year.

“The Central Bank and the Department of Finance need to do more to provide customers with the information they need to get the best deal possible on their mortgage.

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