Lenders offering cash sweeteners of up to 2pc of the loan to tempt mortgage holders to switch

It comes as the gap between the lowest and highest mortgage rates on the market hits a record 3.3 percentage points.

This means householders may be paying a record average of up to €7,292 in extra repayments per year by not switching lenders.

This compares to €3,587 nine months ago as rising funding costs filter down through the pillar banks and non-bank lenders, according to the Q4 Irish Independent mortgage switching index.

The index is based on the average new mortgage drawn down in the last quarter of €308,800 and a highest roll-out variable rate of 7.15pc versus the lowest standard rate on the market, which is currently 3.85pc. managing director Martina Hennessy said a family on the 7.15pc rate, with a 25-year mortgage, would be paying €2,212 a month.

This compares with €1,600 for someone opting for the 3.85pc rate.

Just 1pc of residential home-loan mortgages switched last year, despite the massive financial gains for doing so, she said.

In the last three months of 2023, some 8pc of all mortgage drawdowns were related to switching, whereas the UK averages over four times that rate at 36pc.

Ms Hennessy said the perceived ­barriers to switching mortgage have reduced, with five lenders now offering switcher incentive packages.

“There are now five mortgage lenders in the Irish market who pay cashback to mortgage switchers of up to 2pc of the mortgage at time of switching – including new entrant MoCo,” said Ms Hennessy.

“Those lenders with the most competitive rates have copper-fastened their offering with a switcher package which covers any switching costs.”

She said even the lowest rates on the market are available with a switcher package of €2,000, which means a mortgage holder can switch and benefit from this cash amount.

They have also reduced the documentation required for mortgage switchers, making the process much swifter and easier. The documentation required to switch mortgage should be readily available to mortgage holders and the digital platforms available from banks and brokers make its easier to complete the switch.

Ms Hennessy said the market is ­pricing in rate cuts of up to 1.5pc by the European Central Bank (ECB) this year, and the first of these cuts could start to flow through to tracker mortgage holders over the coming months.

However, mortgage holders on fixed and variable products might find that Irish banks hold their rates tight.

“For the vast majority of Irish mortgage-holders who do not have a tracker rate, the ECB rate cuts do not mean that the Irish banks will follow,” said Ms Hennessy.

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