Mortgages - How easy is it to switch?

Edited on moderators request:
We are with KBC Homeloans and have a large mortgage left of approx €350,000 over 24 years, its working out about €1,700 per month - we're not tied into a fixed interest rate at the moment and would get a better deal if we switched, we also have an opportunity to pay off a lump sum of €40,000 next year when a policy is due up.

Already contacted KBC and spoke about this but they're told me they're sending me out a pack which deals with financial planning and to look through this first. I've looked at it online and it seems to be if you're in trouble they'll offer interest-only for a while. I'm not at that stage yet.

How much is your house worth now do you think? What your options are depends on your LTV - are you in positive equity?

no unfortunately we've no equity in the house, we're tethering on negative equity at the moment.

You might not have many options then, other than trying to get a better rate with your lender (perhaps fixed rate if it's lower than your variable one). Might not be worth fixing, though, as you might be able to switch in a year, when you get €40,000 to pay off the mortgage. Though it will depend on the value of your house at that time - if house prices drop further, paying €40,000 off the mortgage might not get you into positive equity.

In any case, if you have this lump sum coming, you are in a good position, as it will at least help you out until things improve.

thanks for the advice greta. Do you know if mortgage companies penalise you for moving from them?

ktc said:

thanks for the advice greta. Do you know if mortgage companies penalise you for moving from them?

Click to expand...

It depends on the terms of your mortgage. With a variable rate mortgage there shouldn't usually be heavy penalties for early redemption but check the small print. There is probably going to be some cost - an exit fee - but it may be fairly small.