Big jump in number of homeowners switching mortgage provider after ECB hike

There has been a big jump in the number of homeowners planning to switch their mortgage. This follows the European Central Bank (ECB)'s decision in June to hike its key interest rates, with another rise expected next month. New figures from the banks show that last month, the number of mortgage holders approved by a lender to switch provider was up 72pc when compared with the same month last year. Read more Most people under age of 35 believe they will never be in a position to buy a home, study finds Close to 900 homeowners got the all-clear to switch mortgage provider last month, according to the Banking and Payments Federation Ireland (BPFI). And the numbers approved for a top-up to their mortgage were up 25pc in the year to 443 in July. Mover-purchase activity also grew, with 1,255 approvals valued at €482m in July, the highest monthly volume since July 2021. Many homeowners are switching mortgage provider as they have rolled off a low fixed rate and are now facing much higher repayments unless they move lender. The gap between the highest and lowest rates in the market stands at 3.15 percentage points, according to separate data from broker Doddl.ie. Switching from the highest to the lowest rate for a borrower with the average mortgage of €358,000 equates to a saving of €640 a month – or over €7,600 a year, Martina Hennessy of Doddl.ie has calculated. Switching is being spurred by fears of mortgage rate hikes. Earlier this month, two non-bank lenders increased their mortgage rates again. It was the fourth rate rise for ICS Mortgages and the second for Núa Money this year. Repayments on a 35-year, €300,000 fixed-rate mortgage will increase by up to €300 a month following the ICS Mortgages move. The rises come despite mainstream banks resisting passing on the recent ECB rate rise to their variable-rate customers and holding off on increasing new fixed rates. Non-bank lenders such as Núa Money and ICS Mortgages have to rely on expensive wholesale market funding, unlike banks, which have access to household deposits to fund their lending. Mainstream lenders AIB, Bank of Ireland, PTSB and Avant Money, have not increased the cost of their mortgages, but could do so if the ECB keeps hiking rates, experts said. The BPFI said a total of 6,253 mortgages were approved in July. First-time buyers were approved for 3,575 mortgages. This was 57.2pc of the total number of home-loan approvals. Mover purchasers accounted for 1,255 of last month's approvals. The number of mortgages approved rose by 11pc month-on-month and 14.4pc compared with the same period last year. Read more Value of mortgage top-ups at 16-year high as homeowners renovate rather than relocate Chief executive of the BPFI, Brian Hayes, said: 'First-time buyers continued to drive activity, accounting for more than 57pc of approval volumes and reaching a new high of 3,575 approvals, valued at over €1.18bn.' He said switching activity increased sharply, rising by more than 71pc in volume terms and over 81pc in value terms year-on-year. 'Looking at the annualised figures, there were 55,307 mortgage approvals in the 12 months to July 2026, valued at €17.9bn,' Mr Hayes said.