Despite the thousands of euro in savings which can be made by homeowners switching their mortgage provider, Irish consumers still appear reluctant to switch.
According to new figures, just 712 customers to date in 2015 have switched their mortgage from one provider to another. A Central Bank report on mortgage switching from earlier this year found that over 100,000 residential mortgage holders could save on their monthly repayment by changing mortgage provider, and nearly 27,000 of them could save more than €10,000 by switching.
Fianna Fáil Finance Spokesperson Michael McGrath says that the figures are “ indicative of a lack of seriousness on the part of banks about competition in the mortgage market”.
“ While there has been a modest pick-up in the level of mortgage switching in recent months, of the total number of mortgages drawn down to date this year, just 3.7 per cent were customers changing lender. By contrast in 2005, 13 per cent of mortgages transactions were switches,” he said, adding, “It appears the banks are quite satisfied to maintain the status quo in the Irish mortgage market where product innovation is frowned upon”.
Mr McGrath would like to see the Central Bank introduce a statutory code of conduct on mortgage switching, setting out in detail the obligations on financial institutions involved.
Last week the Central Bank proposed rule changes for banks when they are increasing variable mortgage rates. However, they were dismissed by consumer expert Brendan Burgess as being "of no help whatsoever to mortgage holders".