Lenders banking on customer apathy on mortgage rates – survey
The latest doddl.ie Mortgage Switching Index suggests that thousands of mortgage holders on variable rates could be paying over 2.25 percentage points more than necessary.
Doddl.ie said that despite the return of sub-3% variable rates to the market, many borrowers remain on legacy variable products of up to 5.25%, adding that while fixed rates have decreased over the last 18 months, variable rates have remained “stubbornly” high.
Recent Central Bank figures show that 14% of all mortgages are on variable rates, which equates to almost 100,000 homeowners.
Today’s survey – for the second quarter of 2025 – found that mortgage switchers can now save more than double the annual savings available just five years ago.
The average mortgage drawdown now stands at €346,842, up over €112,000 since the second quarter of 2020 – on the back of rising property prices and increased borrowing levels.
As mortgage amounts grow, so too does the impact of securing a lower rate with switchers saving an average of €7,505 per year, up from €3,349 five years ago.
The doddl.ie Mortgage Switching Index is published every quarter and tracks the savings available to mortgage holders in Ireland through switching. It is based on the average mortgage drawn down in the quarter and the differential between the highest and lowest mortgage interest rates available.
In June, the lowest rate on the market dropped below 3% to 2.98% for the first time since 2022.
“Banks have large volumes of existing mortgage customers sitting on these high variable rates and to reduce them would mean large back book repricing which would be costly,” Martina Hennessy, the CEO of doddl.ie, said.
She said that lenders are banking on customer apathy.
“Unless more borrowers actively review and switch, there’s no pressure to bring these uncompetitive rates down and we will struggle with pricing discipline in the Irish market,” she stated.
Martina Hennessy also said that the increase in savings for switchers is the direct result of larger mortgages but also significant interest rate spreads.
“This is leading to a resurgence in mortgage switching. However there still remains a large cohort of homeowners sitting on uncompetitive rates,” she said.
“With rates falling, larger loans being drawn down, and new flexible switching options available, apathy can cost borrowers thousands,” she added.
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