20% jump in mortgage switches expected after Covid-19 crisis
Based on the spike in new enquiries that members have experienced over the last couple of weeks, the Association of Irish Mortgage Advisors say they are anticipating that the volume of people applying to switch their mortgage for a better deal will increase by 20% or more over the next 4-6 weeks.
The AIMA report that while thousands of would-be homebuyers all over the country are desperately calling mortgage brokers and banks, wondering as to the status of their mortgage application or home purchase, a separate cohort of existing homeowners are making similar calls, to see if they can make some savings on their mortgage repayments by switching rates and/or lenders.
Trevor Grant, Chairperson of the Association of Irish Mortgage Advisors (AIMA), which represents mortgage brokers throughout the country, spoke of the opportunity this time presents for some mortgage holders:
“Every household in the country is now pretty much confined to their homes. People are using this as an opportunity to get their financial affairs in order. A mortgage is most people’s largest monthly outgoing – so the savings that can be made by switching are generally larger than the combined benefit of switching utilities, mobile providers and health insurance providers. Mortgage rates have reduced considerably in the last 6 months, with lowest market rate now standing at 2.2% and most lenders will cover any costs associated with switching.
Our members are finding enquiries on switching are up now that people have more time”.
AIMA say their broker members have also been inundated with calls over the last few weeks from purchasers concerned as to whether or not their house purchase will now close, or their mortgage will be approved, as a result of the COVID-19 national emergency.
The mortgage advisory experts say that brokers and lenders are working to the best of their ability to ensure pending house sales get over the line, though they are likely to take longer. Reports have also suggested that all parties involved are understanding of the current situation and are displaying great patience. Innovative ways of viewing homes online from estate agents and digital application submissions from lenders are helping matters.
Mr Grant said that despite the crisis many people are still hoping to continue with their plans for buying a new home:
“Home buyers are understandably worried about how the crisis is going to impact the purchase of their dream home. Many people were on the cusp of buying their first home, they need these deals to go through, and we are assuring them that everything is being done to ensure this happens as soon as possible.
"Of course, there are now obstacles in our paths in so many ways, and when it comes to mortgages, we are endeavouring to help clients navigate these. So, by deploying employees to their homes to work remotely, and maintaining contact with banks and clients via email or phone, our members can continue to help their clients just as before”.
AIMA are also advising those would-be homebuyers who had planned to submit mortgage applications for house purchase to continue to do so. They say that although delays mean approvals might take a little longer, they hope that by the time the mortgages applications are processed, homebuyers will be able to go view the properties they are looking to buy.
Mr. Grant concluded: “We appreciate that the financial situation of so many people has changed so suddenly, and we are united in the hope that they will change for the better just as quick, as soon as the crisis has passed. But for others, the COVID 19 emergency might not have had a direct impact on their finances, and it is to these people we are saying, push ahead with your mortgage application plans, it is absolutely worth your while to do so to mitigate the effect of any delays that may ensue.
"When it comes to those looking to switch, we appreciate it can be a little overwhelming with so many lenders claiming to offer the best deal. For this reason, a market-based mortgage broker can be a very useful resource – they can act as an impartial option to find out which mortgage is best for each individual’s circumstances and to help switchers through the process.”