A Guide for Irish Homeowners
Remortgaging, also called refinancing, allows you to reduce your monthly payments, secure a better interest rate, or release equity from your home. However, timing is crucial as remortgaging at the wrong moment can lead to penalties. This guide explains when you can remortgage without incurring fees, and how to make the most of your options in the Irish market.
What Is Remortgaging?
Remortgaging involves switching your current mortgage to a new deal - either with your existing lender or a new one. It’s typically done to:
- Secure a lower interest rate.
- Change the mortgage term.
- Release equity for renovations or other expenses.
When Can You Remortgage Without a Penalty?
1. At the End of a Fixed Rate Term
This is the most common and penalty-free time to remortgage. Once your fixed rate expires, your lender usually moves you to a standard variable rate (SVR), which is often higher. At this point, you can switch to a new fixed or variable rate without paying a breakage fee.
Tip: Start shopping around 3–6 months before your fixed term ends to lock in a better deal.
2. If You’re on a Variable or Tracker Rate
Variable and tracker mortgages often let you remortgage without penalty, offering flexibility. However, rates may change, so switching to a fixed rate can provide more predictable payments.
3. If Your Fixed Rate Has a Low or No Breakage Fee
Some lenders calculate breakage fees based on interbank rates and the remaining term. Thanks to EU regulations, these fees must reflect the lender's actual financial loss and are often lower than expected.
Example: If market rates have risen since you fixed your mortgage, your break fee may be minimal or zero.
When You Might Face a Penalty
If you remortgage during a fixed rate period, you may be charged a breakage fee. This can apply if you:
- Pay off the mortgage early.
- Pay a lump sum into the mortgage (partial redemption).
- Switch to a new lender.
- Change your repayment terms or interest rate.
Breakage fees vary by lender and are calculated based on:
- The remaining term.
- The difference between your fixed rate and the current market rates.
- The amount being repaid.
How to Check If You’ll Be Charged
Ask your lender these questions before remortgaging:
- Is there a breakage fee?
- How is it calculated?
- Can I get a written estimate?
You can also use our online mortgage calculators or speak to one of our experienced brokers for guidance.
