The latest doddl.ie mortgage switching index has found the savings that homeowners can make by switching their mortgages have doubled in the past six months.
As mortgage interest rates pass 7% for the first time in over a decade, householders may be paying an average of up to €7,099 in extra repayments per year by not switching lenders, doddl.ie claims.
This compares to €3,587 at the end of the first quarter of 2023 as rising funding costs filter down through the pillar banks and non-bank lenders.
The index is based on the average new mortgage drawn down in the last quarter of almost €300,631 and a highest roll out variable rate of 7.15% compared to the lowest standard rate on the market, which currently stand at 3.85%.
Doddl.ie noted that there are also cheaper rates available for those eligible for Green rates or who have lower loan to values.
But despite the financial attractions, mortgage switching activity has decreased dramatically in 2023 as confusion reigns in the market, according to Martina Hennessy, Managing Director of doddl.ie.
"People fear that they have missed the boat, but the reality is that the repayment gap is widening, and it is now more important than ever to review your mortgage rate," Ms Hennessy said.
"Fear of selecting the wrong options means that we do not act at all, and remain paying needlessly high rates of interest on our biggest outgoing. While the pillar banks were initially slow to pass on rate increases this has certainly changed and we continue to see rate increases throughout the market," she said.
She noted that the non-bank lenders who were immediately impacted by rising funding costs have more than doubled their rates in less than two years.
"The last time we had this higher-rate environment, between 2006-2008, people couldn't switch, as loans to values were dropping. We are in the opposite place now and the homeowner's hand is very strong," she added.
