Cork homeowners warned to review their mortgages before rates hike
It’s already the biggest loan most of us will ever have.
And later this summer, the ECB is expected to announce the first in a series of predicted interest rate increases that could see homeowners in Ireland paying a difference of a whopping €97,000 in interest over 25 years.
According to a local mortgage expert, now is the time to do some research and look at switching to lock in the best market rates.
“It is expected that the first ECB rate increase will be approximately 0.25% and that this will be followed later in the year by two if not three further increases,” said Joey Sheahan of South Mall-based MyMortgages.ie, author of The Mortgage Coach.
‘This has huge implications’
“Hundreds of thousands of homeowners will be affected. We are advising anyone who hasn’t reviewed their mortgage in the last two years to look at their options now – and not to wait until later in the year when the market gets busier and when lenders are no longer offering the low rates we’re seeing now.
“The rate someone pays on what is probably the biggest loan they’ll ever have has huge implications for the total sum they repay on their mortgage. It is the difference of €97,000 in interest based on a €300,000 mortgage over 25 years reducing from 4.5% variable rate to 2.5% 25-year fixed-rate”.
It might sound like a pain to start the paperwork, but some banks require just a payslip, photo ID, and six months bank statements for your main account in order to process a straight switcher mortgage.
“It’s not just switchers who need to consider moving swiftly, if you’re a prospective homebuyer and you’re in a position to apply, then now is the time because you will simply not be offered the same low rates in the latter half of the year,” added Mr Sheahan.
“Certain mortgage-holders can lock in 25-year fixed rates from 2.5% to 2.95%, depending on loan to value. These rates are a no-brainer when compared over the long term.”
