Five lenders are now offering cash incentives and easy switching packages in a bid to attract mortgage customers, according to doddl.ie.
Its latest mortgage switching index shows that the gap between the lowest and highest mortgage rates on the market has hit a record 3.3%.
It states that householders could be paying a record average of up to €7,292 in extra repayments per year by not switching lenders.
The index is based on the average new mortgage drawn down in the last quarter of €308,814 and a highest roll out variable rate of 7.15% versus the lowest standard rate on the market – currently 3.85%.
This has resulted in a record 38% gap between 25-year monthly repayments of €1,604 on the lowest rate and some householders on €2,212 at the highest end of the scale, the index states.
According to doddle.ie, 8% of all mortgage drawdowns between October and December last year were related to switching, whereas the UK averages over four times that rate at 36%.
Martina Hennessy, Managing Director of doddl.ie said the perceived barriers to switching mortgage have reduced.
"There are now five mortgage lenders in the Irish market who pay cashback to mortgage switchers of up to 2% of the mortgage at time of switching - including new entrant MoCo," she said.
"Those lenders with the most competitive rates have copper-fastened their offering with a switcher package which covers any switching costs.
"Mortgage switching is hugely important as it creates discipline in the market and promotes competition which leads to lower rates," she added.
Ms Hennessy said lenders have also reduced the documentation required for mortgage switchers.
"The documentation that is required to switch mortgage should be readily available to mortgage holders and the digital platforms available from banks and brokers makes its easier to complete the switch," she said.
The market is pricing in rate cuts of up to 1.5% by the ECB in 2024 and the first of these cuts could start to flow through to tracker mortgage holders over the coming months.
However, Ms Hennessy said mortgage holders on fixed and variable products might find that Irish banks hold their rates tight.
"For the vast majority of Irish mortgage holders who do not have a tracker rate, the ECB rate cuts do not mean that the Irish banks will follow," she said.
"There are several factors which will impact downward rate movement in the Irish market, including the funding mix of Irish lenders but lack of competition is also a major factor.
"Our pillar banks may have been slower to increase rates following ECB rate increases, but when rates and funding costs start to drop, they may also be slow to pass on any decreases," she added.
