There is a lot of noise about switching. Switch your energy, your broadband and of course your mortgage. Apart from the administrative effort to process these switches they are generally a free source of savings and yet the vast majority of customers do not avail of these free giveaways. There may be many reasons for this but fear of dealing with finances is certainly one of them.
People often develop a deep routed anxiety when it comes to dealing with their finances. The thought of bills, mortgage statements or tax returns often drive anxious responses far disproportionate to the administrative issues at hand. Are you one of these people? Do you suffer from mortgage anxiety?
If you are, the first thing you need to do is understand what savings you are leaving behind or another way to think of it is how much are you overpaying. While the economic analysis as to what you could save versus what you are overpaying is the same, these different turns of phrase can prompt different emotions in people.
To give you a quick sense of what it is worth to switch, the team at switcheroo.ie developed this quick table to give you are guide on what you could save. This is a benchmark analysis based on an assumed starting point of mortgage rate of 3.0% and a mortgage size of €300k.
Switching Savings Table @ 3% and €300k
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Reduction in Rate |
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0.5% |
0.75% |
1.0% |
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Term of Mortgage |
15 years |
€12,848 |
€19,168 |
€25,419 |
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20 years |
€17,780 |
€26,488 |
€35,074 |
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25 years |
€23,035 |
€34,273 |
€45,321 |
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To explain a little further: If a customer with a €300k mortgage and a 15-year term is able to reduce their rate by switching to a rate that is 0.5% less than their existing rate, they would save €12,848 over the life of that mortgage. At the other end of the scale a customer with 25 years on their mortgage reducing their rate by 1% would save €45,321 over the life of the mortgage.
So, are you going to stick and hide or switch and save? Register at switcheroo.ie for a free personalised analysis of what savings you could achieve by switching.
Alison Fearon is Managing Director of Switcheroo.ie
Panda capital Limited T/A Switcheroo is regulated by the Central Bank of Ireland.
