New proposals from the Central Bank to aid mortgage switching are helpful but fail to address the biggest hindrance — the level of paperwork and administration in the process, a mortgage expert has said.
Irish Brokers Association (IBA) mortgage committee chairman Michael Dowling said the Central Bank’s proposal that lenders inform consumers about other available mortgage options that could save them money, as well as helping consumers compare their existing mortgage to other mortgage options, was to be welcomed broadly.
However, he added: “Anything that helps consumers is to be welcomed, such as asking lenders to cooperate with each other. There are huge savings to be made but unfortunately the process is currently too cumbersome and the Central Bank proposals don’t address that aspect.”
Mr Dowling said the level of paperwork involved in switching mortgages put customers off.
“It’s treated as a completely new application, which means credit histories, passports, etc have to be produced. You’d be doing well to get it done within two or three months, and that is if it is being processed at a good pace. Merit should be given to someone with a good track record,” he said.
The Central Bank said its research showed many consumers could make significant savings by switching their mortgage, and that information to help consumers compare was widely available.
However, the watchdog said research also showed the need for greater transparency for consumers which would clearly inform them about the potential savings they could make.
The proposals are open to public consultation until November.
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