Mortgage switching activity surges during third quarter as interest rates increase

The period between July and September saw a total of 14,217 mortgages, at a combined value of €4.6m, drawn down by borrowers

Mortgage switching activity surged during the third quarter of this year as drawdowns in this segment increased by over 41% compared to the same period last year, as the European Central Bank (ECB) continued to increase interest rates in response to higher inflation.

According to data from the Banking and Payments Federation Ireland (BPFI), a total of 14,217 mortgages — valued at a combined €4.6bn — were drawn down by borrowers between July and September. 

This is up from the 12,570 mortgages drawn down during the same period last year, which were valued at just under €4bn.

During this period, 8,164 first-time mortgages were drawn down, up 9% year-on-year, valued at a combined €2.68bn, up 11%; resulting in an average mortgage size of €328,270 — up from €322,744 last year.

There were 2,555 mover-purchaser mortgages, up 6.9%, with the combined value increasing 9.7% to just over €1bn.

The number of mortgage drawdowns which were either re-mortgaging or switching increased by 41.7% to 2,214, year-on-year, with a combined value of €694m, up over 50%.

There were 35,449 mortgage drawdowns valued at almost €11.4bn in the first nine months of 2026. 

The ECB has increased interest rates twice so far this year, once in June and once in September. Both of the increases were by 25 basis points. 

The ECB is widely expected to increase rates at least one more time before the end of the year.

The next scheduled meeting is at the end of this month with the final meeting of the year taking place in December.

In response to the interest rate hikes, PTSB announced yesterday that it was increasing interest rates on its fixed-rate mortgage products by a weighted average of 0.3%.

Its three-year fixed rate will increase from 3.75% to 4.05%, its four-year fixed rate will increase from 3.25% to 3.45%, its five-year fixed rate will increase from 3.6% to 3.9%, and its seven-year fixed rate will increase from 3.35% to 3.6%.

The rate changes are effective from Thursday. 

The bank said there are no changes for customers on existing fixed rates and there are no changes to the bank’s variable rates for new or existing customers.

'Continued strength in the mover purchaser market'

BPFI chief executive Brian Hayes said first-time buyers continue to drive the mortgage market, “accounting for almost six in every 10 drawdowns”.

“We also saw continued strength in the mover purchaser market, with drawdown values exceeding €1bn for the first time since quarter two 2008," he said. "Switching reached the highest volume and value levels since quarter four 2022.” 

Trevor Grant, chairperson of the Association of Irish Mortgage Advisors, said that the sharp increase in mortgage switching activity “shows that mortgage holders are voting with their feet and aware that substantial savings can be made by shopping around for their mortgage”.

He said: “Interest rates are increasing so it’s important that borrowers get the best terms on their mortgage.” 

Mr Grant said it has “never been more important to shop around for your mortgage”.

“There is still plenty of competition out there amongst lenders for borrowers to take advantage of and substantial savings can be made by ensuring you’re on the best mortgage deal," he added.

In terms of property types being bought, Mr Hayes said 3,244 first-time buyer mortgages were used to purchase new properties during the quarter.

He said: “The increase in new properties was driven by mortgages on new build property purchases rather than self-builds where first-time buyer volumes fell by 5.8% year-on-year to 666. 

"Notably, the number of first-time buyer mortgages on second-hand properties increased to 4,920, the second highest quarterly volume in the series, while the value reached a record €1.56bn."

The BPFI also released data around the number of mortgage approvals in September.

A total of 5,393 mortgages were approved last month, up 13.3% year-on-year, of which 3,153 were for first-time buyers, while mover purchasers accounted for 1,008. 

Mortgages approved in September were valued at €1.74bn.

Re-mortgage/switching activity rose by 31.2% year-on-year in volume terms and by 40.1% in value over the same period.