Switching Mortgage Lenders

How much would your monthly bill need to increase by before you would consider switching mortgage lenders?

Apparently, the average borrower would only switch if they could save at least 140 euro a month according to new research. This 'trigger point' reflects homeowners' desire to save money on their monthly repayments, but only if the price is right. However, with more than a quarter of borrowers content to languish on their lender's standard variable rate (SVR) it is clear that many remortgaging misconceptions persist.
Research reveals that almost a third of borrowers are put off switching lenders because they think it takes a lot of time and hassle. A similar number think it would be expensive to switch deals. A fifth of homeowners don't know where to start and 14% didn't know they could remortgage unless they moved house. One in five borrowers have simply never considered a fresh deal. These myths and misconceptions are costing home owners a fortune.

Homeowners are increasingly recognising the savings they can make on their monthly repayments by remortgaging onto a competitive deal. Despite this growing awareness, however, there still exists some crucial misconceptions. One of the biggest factors affecting homeowners' propensity to switch lenders is the belief that the process is too time consuming and taxing. In reality though, once you've shopped around or visited a mortgage broker to find the best deal, the process is pretty simple and hassle-free and takes typically 4 to 6 weeks.
Another aspect affecting homeowners is the assumed cost. While it is true that many lenders have increased their arrangement and exit fees over the last couple of years there are still a number of competitive deals available. There are those with free legals and free valuation fees, some with added benefits such as cashbacks, meaning, in many cases, the savings that can be achieved through remortgaging far exceed the costs.
This example highlights the potential savings you could make: a homeowner with a 100k mortgage on an average SVR could save around 225 euro a month (2,400 a year) by switching to a market-leading deal.

Think carefully about what you would like to get out of a new mortgage deal - you may want greater flexibility in addition to better value. Then find out whether you are tied into any fixed term deals or will have to pay a penalty if you switch. You may also want to ask your existing lender whether they want to provide a better deal rather than let you take your business elsewhere. Once you know what their best offer is, you will have something to compare to other deals.
Switching lenders may not be worthwhile in every case and some borrowers with lower balances may not benefit from switching. However, in most other cases it makes complete financial sense.