Mortgage interest rates are set to rise again, meaning that homeowners on a variable rate will be paying more each month. The good news is that mortgage providers are always competing with each other for new business, and homeowners have the option to switch providers. If you do your research, you might find that you will be able to make a significant saving each month by locking in to a fixed term rate.
It can take a little bit of time to obtain documents from your old provider, so the first step should be to contact your solicitor and advise of your intention to switch mortgage provider. We will then contact your bank requesting to take up the title documents on trust.
Simultaneously, you can contact mortgage providers and determine who is making the best offer for you. Once you decide on a bank, the loan offer and mortgage pack will be sent to your solicitor. We will invite you to the office to explain this document, and obtain your signature. We will send this back to the bank.
Like your original mortgage, you will need to comply with the bank’s conditions of drawdown. This might include obtaining a new life installation policy.
Once the funds are received by us, we satisfy the original mortgage and receive a notification that it is vacated. We then have the old mortgage de-registered in the Land Registry and the new mortgage registered. We send the title documents to the new mortgage provider.
You will then be paying a lower amount each month to the new provider. It is advisable to consider switching mortgages every few years to get the best rate for you. You will have to pay a penalty if you do break a fixed rate term early, but for some homeowners this may still save money. It is always advisable to consider switching when you come to the end of a fixed rate, and now is an ideal time to consider switching to avoid the increasing rates of interest, and to avoid uncertainty over the next five years.
The above is provided for information purposes and is not intended as legal advice. We, at Fitzsimons Redmond LLP, would be happy to talk to you about switching mortgage provider. Please contact us on 01-676 3257.
By Lisa Quinn O’Flaherty
Partner at Fitzsimons Redmond LLP