Analysis as at 12th September 2023.
This refers to AIB mortgages only, and not their subsidiaries EBS & Haven.
All lenders calculate break fees by comparing comparing the funding rate when you took out the mortgage with the funding rate when break out of the fixed rate. So when interest rates are rising, there should be no break fee. When interest rates are falling, there will usually be a break fee.
But AIB have an additional clause in their fixed term breakage fee which means that they also compare the fixed rate you are overpaying / breaking to the rates they currently charge for new business for the remaining term of your fixed rate. If the new business rate is higher than the rate you fixed at for the same period, there will be no break fee.
Any AIB customer breaking out today 12th September 2023, will not face a break fee, because they fall into one of the following categories:
- For customers on the Green 5 year rate, all shorter term rates are higher than your rate so a break fee cannot be charged
- For customers who fixed at any time prior to 30th June 2023, current new business rates are higher than your rate, so there is no break fee
- For all other customers who fixed since June 2023, there will be no break fee as AIB do not charge a break fee in the first year
The following rules will apply at a later date:
This situation will remain until such time as AIB reduce mortgage rates for new customers.
Additionally, from 14 October 2023, AIB are updating their T&Cs so that all fixed rate mortgage customers can make payments, over the normal regular scheduled payments, up to €5,000 each calendar year for the term of the fixed rate, without calculating if a break fee is due.
This refers to AIB mortgages only, and not their subsidiaries EBS & Haven.
All lenders calculate break fees by comparing comparing the funding rate when you took out the mortgage with the funding rate when break out of the fixed rate. So when interest rates are rising, there should be no break fee. When interest rates are falling, there will usually be a break fee.
But AIB have an additional clause in their fixed term breakage fee which means that they also compare the fixed rate you are overpaying / breaking to the rates they currently charge for new business for the remaining term of your fixed rate. If the new business rate is higher than the rate you fixed at for the same period, there will be no break fee.
Any AIB customer breaking out today 12th September 2023, will not face a break fee, because they fall into one of the following categories:
- For customers on the Green 5 year rate, all shorter term rates are higher than your rate so a break fee cannot be charged
- For customers who fixed at any time prior to 30th June 2023, current new business rates are higher than your rate, so there is no break fee
- For all other customers who fixed since June 2023, there will be no break fee as AIB do not charge a break fee in the first year
The following rules will apply at a later date:
- AIB will compare your rate to the complete year up & down from remaining term. So if you are a few months into a 4 year fix, they will compare to both 4 year and 3 year rate, and provide best outcome to customer. So if either the 3 year or 4 year rate is higher there will be no break fee.
- For the first 12 months a break fee cannot be applied, as they compare your rate to the same rate
- After 12 months, the maximum break fee is the difference between your rate and new business rates, by years remaining. So if on 4 year rate, after 12 months the 3 year rate is 0.05% lower. So the maximum break fee per 100k would be €150 (100,000*0.05%*3year); this is the maximum, as a funding rate comparison is also completed.
Additionally, from 14 October 2023, AIB are updating their T&Cs so that all fixed rate mortgage customers can make payments, over the normal regular scheduled payments, up to €5,000 each calendar year for the term of the fixed rate, without calculating if a break fee is due.
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