A massive campaign to get 20,000 variable-rate mortgage holders to switch to another provider is to be launched.
The One Big Switch group aims to do a deal with a bank for lower mortgage rates in return for delivering thousands of switchers to it.
The group has already negotiated deals with electricity providers and health insurers for those who sign up with it. It has a database of some 80,000 registered consumers.
There are around 370,000 people on variable rates in this country, with customers paying some of the highest interest rates in the eurozone.
It is estimated that switching to the best-value mortgage could see a family with a €250,000 home-loan saving around €1,500 a year.
“If 20,000 people are prepared to switch together it will unlock the buying power for a group discount,” Lachlan Harris of the One Big Switch campaign said.
Once the group has thousands of mortgage holders who register for the mortgage campaign, One Big Switch will then negotiate with the banks for an exclusive group discount.
About 150,000 of those with a variable rate are in positive equity and could therefore switch. Mr Harris said the eurozone average mortgage rates were 1.3 percentage points lower than those in this country. He said savings of €2,500 a year on mortgage costs could be achieved.
Over the life of a mortgage, the difference in cost between here and in other Eurozone countries could be as much as €30,000. “We feel that collective mortgage switching will turbo-charge competition in the banking market,” he added.
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