A Guide to the Costs of Mortgage Switching in Ireland
Switching your mortgage can offer significant financial benefits, such as lower monthly repayments, better interest rates, or releasing equity. To make an informed decision, it’s essential to understand the typical fees and costs you may face during the process in Ireland. This guide highlights these expenses to help you assess the true value of switching.
Why Switch Your Mortgage?
Many homeowners switch their mortgage to:
- Lower their interest rate.
- Reduce monthly repayments.
- Shorten the mortgage term.
- Reduce their overall cost of credit.
- Access better features or flexibility.
- Release equity for renovations or other needs.
Mortgage brokers like Sherry FitzGerald Mortgages can help you compare lenders and find the most suitable deal, often saving you thousands over the life of your loan.
Common Fees When Switching
1. Valuation Fee
Before approving your new mortgage, the lender will require a professional valuation of your property. This ensures the loan-to-value (LTV) ratio is accurate.
- Typical cost: €150–€250.
- Must be carried out by a valuer approved by the new lender.
2. Legal Fees
You’ll need a solicitor to handle the legal aspects of switching, including transferring the mortgage deed and liaising with both lenders.
- Typical cost: €1,000–€1,500.
- Some lenders offer cashback or cover legal fees as part of switching incentives.
3. Redemption Fee (Early Exit Charge)
If you’re currently on a fixed-rate mortgage, you may face a penalty for exiting early.
- Typical cost: Varies by lender and remaining term.
- Check with your current lender before switching.
4. Mortgage Protection Insurance
You may need to switch or update your mortgage protection policy.
- Cost: Depends on age, health, and coverage.
- Some lenders require a new policy if you were previously under a group scheme.
5. Stamp Duty
No stamp duty is payable when switching your mortgage, as you’re not purchasing a new property.
Potential Savings vs. Costs
While switching involves upfront costs, the long-term savings can be substantial. For example:
- A lower interest rate could save you €100–€300 per month
- Cashback offers from lenders may offset legal and valuation fees
- Shortening your mortgage term could reduce total interest paid
Use our mortgage switching calculator to estimate your savings.
Tips for a Smooth Switch
- Get professional advice: A broker can guide you through the process and ensure you’re making the right move.
- Compare lenders: Use a Broker and get expert advice beyond just interest rates — consider fees, flexibility, and incentives.
- Check your current mortgage: Understand any penalties or restrictions.
- Gather paperwork early: Most lenders now ask for a shorter list of documents, making the process smoother. Documents required are ID, income verification, and bank statements.
Final Thoughts
Switching your mortgage can save you money, but it’s important to weigh these benefits against the costs. With the right support and planning, you can make the process efficient and maximise your financial gain.
