Mortgage holders are moving early to seek protection from potential interest rate rises as rising household costs leave borrowers more exposed to even modest rate increases.
The shift comes as approximately 40,000 mortgage holders are set to roll off fixed mortgage rates during 2026, with growing market expectations of ECB increases adding to concerns about higher repayments in the months ahead.
Doddl chief executive, Martina Hennessy says more homeowners are investigating whether they can secure a better rate by switching to a new lender much earlier – in some cases a year before their current fixed term ends.
The latest Doddl Mortgage Switching Index reveals potential savings of up to €647 per month, or €7,764 a year, by switching from the highest to lowest rate on the market, based on the latest average home purchase mortgage amount of €360,836.
Meanwhile figures from the Central Bank show the average new mortgage rate in Ireland currently standing at 3.51pc. If rates were to increase by 0.5pc, repayments would rise by more than €100 per month – or €1200 per year- on the current average mortgage amount over a 30-year term.
“There is certainly a greater sense of urgency among mortgage holders as some analysts predict up to three ECB rate increases this year, which could have a knock-on impact on mortgage rates in Ireland towards the end of this year,” says Ms Hennessy.
“We are seeing fixed-rate customers engage much earlier to understand their options and avoid scrambling if and when rates begin to move.”
“They are increasingly focused on protecting themselves against future repayment shocks.”
Ms Hennessy says property price inflation means that borrowers are taking on larger levels of debt to fund home purchases, increasing sensitivity to upward rate movements.
“Irish borrowers are carrying significantly larger mortgage balances than just a number of years ago. The average home mortgage drawdown now stands at €360,836 – almost €80,000 higher than the same quarter three years ago.”
“When households are already absorbing higher day-to-day living costs an additional increase in mortgage costs becomes much more pronounced.”
Further data from Doddl show that switching activity over the past three months was driven primarily by customers seeking savings or repayment certainty. 63pc of switching were for like-for-like mortgages to lock down a lower rate for longer.
This is in contrast to 2025 when a key priority for the majority of switchers (51pc) was to release equity for home improvements.
The trend in cost-conscious switching comes at a time when household budgets are already under immense strain.
Hennessy said borrowers remain unaware that, in many cases right now, it is possible to switch mortgage before the expiry of a fixed-rate terms and not incur a penalty.
The Doddl Mortgage Switching Index shows current mortgage rates starting at 3pc, while borrowers who purchased or switched during the period of rapid rate increases between 2022 and 2024, could be on fixed rates well above 4pc.
“A common misconception is that once you fix your mortgage you are completely locked in until the end of the fixed term, but that is not always the case.
“While break penalties can apply, current market conditions mean they may be lower than many borrowers expect and, in some cases, may not apply at all.
“Those unaware of this could risk drifting into higher rates waiting to roll out of current fixed terms. Where there is a break fee potential, monthly savings from a lower rate, plus cashback offers of up to 2pc of the mortgage, often more than neutralises this fee.”
Examples from recent switching activity included a borrower with a €759,000 mortgage fixed at 3.7pc until January 2028 switching to a 3.4pc fixed rate with another provider. The projected interest savings by coming off the higher rate 18 months earlier with no break fee was more than €2,200, alongside 2pc cashback of over €15,000.
A second borrower with a €275,000 mortgage fixed at 4.25pc until 2029 switched to a 3.40pc fixed rate, also with no break fee, resulting in projected savings of almost €4,900 alongside cashback of €5,500.
Doddl said brokers remain the go-to channel for switchers who want to compare options, with 56pc of mortgage switching completed via the broker channel in the first quarter of this year.