Switching your mortgage can be a great way to save money, reduce your monthly repayments, or secure a better interest rate. However, the process isn’t always straightforward, and many homeowners in Ireland make costly mistakes that can reduce the benefits of switching.

If you’re considering a switching mortgage, avoiding these common pitfalls can help ensure a smooth transition and maximise your savings.

1. Not Checking Your Current Mortgage Terms

One of the biggest mistakes homeowners make is failing to review their existing mortgage terms before considering a switch. Important factors to check include:

• Your current interest rate – Are you on a fixed or variable rate?
• Breakage fees – If you’re on a fixed-rate mortgage, you may have to pay a penalty for switching early.
• Remaining loan term – Will switching actually benefit you in the long run?
• Loan-to-value (LTV) ratio – Has your property value changed, and how does it affect your mortgage options?

Before making a move, request a redemption figure from your lender to understand the exact amount you owe and whether any penalties apply.

2. Ignoring Breakage Fees and Other Costs

Many borrowers switch mortgages without fully considering the costs involved. While switching can lead to significant savings, some expenses may eat into your potential benefits, such as:

• Breakage fees – If you’re leaving a fixed-rate mortgage early, your lender may charge a penalty. These fees vary but can sometimes be high.
• Legal fees – You’ll need a solicitor to manage the transfer, typically costing between €1,000 and €1,500.
• Property valuation fee – Your new lender will require a valuation of your home, costing around €150 to €200.
• New lender’s administration fees – Some banks charge setup or application fees, though many waive these for switchers.

Tip: If your potential savings exceed the cost of switching within a reasonable timeframe, the switch is still worth considering. Some lenders also offer cashback incentives to offset these costs.

3. Only Looking at Interest Rates

While securing a lower interest rate is often the main motivation for switching, focusing only on the rate can be a mistake. Other factors to consider include:

✔ Fixed vs. Variable Rates – Do you prefer the stability of a fixed rate or the flexibility of a variable rate?
✔ Overpayment Options – Can you make extra repayments without penalties?
✔ Term Length – Extending your mortgage term may reduce monthly payments but increase the total interest paid.

A mortgage with a slightly higher rate but better flexibility could still be a better option in the long run.

4. Not Shopping Around for the Best Deal

Many homeowners make the mistake of only checking mortgage rates from their current bank. While your existing lender may offer a retention deal to keep your business, it’s always worth shopping around.

Tip: Use online mortgage comparison tools or speak with a mortgage broker who can access multiple lenders and help you find the best deal.

Some banks offer cashback deals (e.g., €2,000 to €5,000) that can help cover switching costs, making the move even more attractive.

5. Not Getting Mortgage Approval in Principle First

Before committing to switching, you should get approval in principle (AIP) from your new lender. This confirms that you meet their lending criteria and gives you confidence in your eligibility before proceeding with legal and valuation costs.

Many borrowers make the mistake of assuming they’ll automatically qualify for a new mortgage just because they have an existing one. However, lenders assess applications based on:

• Your income and employment stability
• Your credit history
• Your overall debt levels (car loans, personal loans, etc.)
• Your loan-to-value (LTV) ratio

If you’re self-employed or have irregular income, securing approval might require additional documentation.

6. Overlooking Your Credit Score and Financial Health

Your credit history plays a crucial role in your mortgage approval process. Even if you already have a mortgage, a poor credit score could affect your ability to switch to a better deal.

✔ Check your credit report – Request a free credit report from the Central Credit Register (CCR) before applying.
✔ Avoid taking on new debt – New loans or missed payments can lower your score.
✔ Ensure all bills are up to date – Missed utility or loan payments can impact your mortgage application.

Tip: If your credit history isn’t perfect, work on improving it before applying for a mortgage switch.

7. Waiting Too Long to Start the Process

A common mistake homeowners make is waiting until their fixed term ends before looking at switching options. If your fixed rate is due to expire in a few months, you should start exploring new mortgage deals at least 3-6 months in advance.

If you don’t act in time, your lender may automatically move you to a higher variable rate, leading to unnecessary costs.

Tip: Some lenders allow you to lock in a new rate in advance, ensuring a smooth transition once your current term ends.

8. Choosing the Wrong Mortgage Term

When switching, some borrowers extend their mortgage term to reduce monthly repayments. While this can ease short-term financial pressure, it often results in paying more interest over the long run.

For example:

• Remaining Mortgage: €200,000 over 15 years at 4% → Total Interest Paid: €66,000
• New Mortgage (Switched to 25 Years): €200,000 over 25 years at 3.5% → Total Interest Paid: €99,000

Tip: If affordability allows, try to keep your mortgage term as short as possible to minimise overall interest costs.

9. Not Using a Mortgage Broker for Expert Advice

Many homeowners go through the mortgage switching process alone, assuming they can find the best deal themselves. However, mortgage brokers have access to exclusive rates and can compare multiple lenders, saving you time and effort.

✔ Brokers can negotiate better terms on your behalf.
✔ They understand lender criteria and can advise on approval likelihood.
✔ Many brokers offer free services, as they receive commission from the lender.

If you’re unsure where to start, consulting a broker can help you make an informed decision.

10. Forgetting to Review Your Mortgage Again in the Future

Even if you successfully switch to a better deal, don’t assume you’re set for life. The mortgage market is constantly changing, and better deals may become available down the line.

Tip: Review your mortgage every 2-3 years to ensure you’re still getting the best rate, especially if your fixed term is coming to an end.

Final Thoughts

Switching your mortgage can be a powerful way to save money, but avoiding common mistakes is key to maximising your benefits. By carefully reviewing your current terms, comparing offers, and seeking expert advice, you can ensure a smooth transition and long-term financial savings.

If you’re considering switching, now is the time to act—start researching your options, get approval in principle, and secure a deal that works best for you.