Responding to the recent Banking and Payments Federation Ireland mortgage drawdowns for the second quarter of 2018, Brokers Ireland have stated that the standout figure is a 95.5 percent year-on-year increase in the volume of re-mortgaging/switching, indicating that Irish consumers are getting the message there is value to be had in switching.
Rachel McGovern, Director of Financial Services at the organisation which represents almost 1,300 firms said, "not only are these consumers getting better value for themselves, but they are driving competition between lenders and forcing interest rates down for their fellow citizens.
"The lack of competition in the Irish banking system has been acknowledged by the Central Bank and paid for dearly by borrowers who have been paying double the interest rates of their European counterparts.
"That is changing, however. As consumers are getting more value savvy and switching their mortgages, lenders are responding by lowering their rates and improving their product offerings, such as longer-term fixed interest rates. Up to last year, just one Irish lender had a 10 year fixed interest rate. That has changed, she said.
Ms. McGovern said the message to Irish consumers has to be ‘keep looking around for better value’.
She made the point, however, that a recent Central Bank report showed there is still a 1.41 percent gap between new Irish mortgage lending and that of the rest of the Eurozone.
“In other Eurozone countries fixed mortgage rates can be had for 20 year periods or longer.
“If consumers keep on switching, which can be cheap and easier to do as the process has been simplified, they may force rates even closer to the European norm. The sooner that would happen the better, because it’s unlikely to happen when the ECB begins increasing rates once again,” she warned.