Mortgage switching activity surges as homeowners look to lock in interest rates

Mortgage switching and remortgaging activity continued to surge last month, data indicated, as homeowners look to lock in new terms in advance of further European Central Bank (ECB) interest rate increases. In its latest mortgage approvals data release, the Banking and Payments Federation of Ireland (BPFI) said on Friday that remortgage and switching activity rose by 71.6 per cent in volume terms last month compared to July 2025 and 81.1 per cent in value terms to €285 million. Overall, 6,253 mortgages were approved in all categories, up 14 per cent in volume and up 15 per cent in value terms to €2 billion. “These are the highest monthly levels since the data series began in 2011, although it’s worth noting that mortgage approval activity typically peaks between May and July each year,” BPFI chief executive Brian Hayes said. READ MOREThe increase in remortgage and switching activity is notable after a decline in recent years as rising interest rates made it less attractive.Will the upcoming budget drive inflation and increase costs for Irish households?Martina Hennessy, managing director of online mortgage adviser Doddl, told The Irish Times that the uptick was being driven by two factors: the current rate environment and demand among homeowners to release equity from their property to fund home improvements. Despite one ECB rate hike so far this year, the rate environment here has been relatively stable this year. “While we have seen some rate increases in 2026, they have been from non-bank lenders who rely more heavily on market funding,” she said. “In the main, rates have remained stable and competitive this year, with rates starting from 3 per cent. Property price inflation means that homeowners who purchased two years ago at 90 per cent finance can now unlock much lower rates at the sub-80 per cent loan-to-value bracket.”With at least one more ECB interest rate increase expected this year, homeowners can save by locking-in new rates now. Separately, she said switcher products with equity release have “become a large part of our switcher business at Doddl, with 54 per cent of our switchers releasing equity, the majority of which is being used to fund home improvements or clear home improvement loans”.