BOI - change to new fixed rate

[lotus]

A few months ago I changed from BOIs variable mortgage rate of 4.5% to their 2 year fixed rate of 3.8%. The reduced repayments have been most welcome.

Today, I received a letter offering me their new reduced rates for fixed mortgages - 3.6% for 2 or 3 year fixed. I though they mightnt let me change to this as I had changed so recently. I rang them and they told me I can but I will have to pay a break out fee of €260 which will immediately seep up the savings I make for the 1st 8 months. However, I would be in the black after that and my repayments would be €30 a month less than what I'm currently paying.

So am is it advisable for me to change from my current rate of 3.8% to the new rate of 3.6% and pay the break out fee or should I hold tight and see of their fixed rates faall further? Would I be better going for the 2 or 3 year fixed rate? They are boht 3.6%

Thanks!

 

[ClubMan]

The question of whether or not to fix in specific circumstances is discussed elsewhere and is a live issue with, in many case, no clear answer.
In your specific case keep asking BoI if they will let you switch without paying any penalty.
Almost certainly they will not let you but maybe if you keep annoying them enough they might relent...

 

[Steven Barrett]

Cost of breaking current rate: €260
savings by going to lower rate: €720
Net saving: €460

Don't get hung up on always being on the lowest possible rate, you will never be able to do it, especially if you fix. Pick the term that suits you best and stick with it. Rates may go up, they may go down.


Steven
www.bluewaterfp.ie