Fixed rate mortgage holders are being urged by Donegal Fianna Fail TD Charlie McConalogue to check with their lender to see if they can switch and get a better interest rate without being hit by large penalties.
A new EU rule – the Mortgage Credit Directive – has changed the way lenders calculate a breakage fee, which should reduce the large penalties which had been used by banks to keep customers with them.
Deputy McConalogue (pictured) said: “I have come across a number of cases recently where mortgage holders have been able to switch lender to avail of a better rate without having to pay a large penalty to their original provider. These are people who were on a relatively high interest rate and can now make major savings by switching to a variable or lower rate with their current provider or
by moving their homeloans to another provider.
“Fixed rate mortgage holders owe more than €14bn to lenders – some may have secured a competitive rate but many more are stuck on high rates of more than 4% or 5%. Under this new rule, they can break their current agreement and move to a better deal.
“Mortgage holders with high fixed rates should get in touch with their bank to find out if there is a charge associated with exiting the loan early. The Central Bank should also be making fixed rate mortgage holders aware of this new rule by undertaking a public awareness campaign.”
If you have a story or want to send a photo or video to us please contact the Donegal Now editorial team. Between 9am and 5pm Monday to Sunday please call 074 9112712. Between 5pm and midnight please call or text 086 792 2103. Or you can email [email protected] at any time.