DONEGAL TD Charlie
McConalogue has urged fixed rate mortgage holders to
check with their lenders for a better deal.
He said they should see if they can switch and get a
better interest rate without being hit by large
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 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 home
loans 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,” the FF