Get out of fixed rate penalty?

No smoke without fire maybe? That would be interesting if they did change that rule.
 
fuzzy duck,

would you not be worried that if things turned around in 2010 or so that interest rates would rapidly increase again and youd be back to square one if you were on variable?

I know if i were in that situation thats what I would be most concerned about
 
daisyduck

I am not going to read back over your previous posts as suggested.

I am interested though that you said you took out your morgage 6 months ago and fixed at 5.99% and were not 'delighted' with it

i also took out a mortgage 6 months ago and went for a tracker. did you not have the option then?
 
would you not be worried that if things turned around in 2010 or so that interest rates would rapidly increase again and youd be back to square one if you were on variable?

I know if i were in that situation that's what I would be most concerned about
Click to expand...
yes I agree. I fixed it for the long haul because I knew it would dip but then maybe over the years if it shot up again I might even out the damage. On the other hand, back on variable there'd always be the option to fix again I guess at a more comfortable lower rate.

My problem is broader than that now. I have been on interest only repayments up until next christmas because I've been investing money renovating the property. Most people experienced the sudden rise €100 nearly a month raise in rates over such a short time, followed with a choice to fix. I had 1 day to decide and get the instruction verified.... I rushed it in. I stupidly never even considered what the annuity repayments at this rate would be! Of course its a sum which would mean I'd have to find a different higher pay check!

Since I've lost my lodger to unemployment, and i am self employed but the industry has been very quiet.

I don't think anyone could have predicted the sudden nature of the change in earning potential.

All this bundled together has me investigating possibilities before next christmas arrives! Its a long time in economics so hopefully things will change.
I will definitely not be paying €23,000 for nothing. It would kill me to hand over that sort of money instead of investing it in the property for further extension or improvement.

Anyhow its interesting that there's wee talk of a change in fee.....It'd be great while times are really tough to put pressure on, to see if there is a possibility of change.
I'm not very versed on this kind of thing. I don't know who the banks, in this case IIB has bought my fixed interest off.... who gets this break fee??
 
I have a split mortgage with AIB, half on tracker, half on fixed @ 5.25 for 3 or 5 years from last July (cant remember if it is 3 or 5 years). They have a genius rule - they can only inform you of the costs of breaking fixed mortgage contract by post, and the offer is only valid on the day that the item is requested. So, technically, unless you have same day post you cant do it.

I wanted to find out about the cost of moving my fixed to variable (or ideally tracker, but I doubt they will be having any of that). When I rang on Monday they said they'd post it out. When I rang back on Wednesday to find out where it is, they said they are dealing with a large number of such requests and would get to it over the next few days. I'd love to know how many are applying.

Anyone here do this with AIB? Would love to know if they are more reasonable than other institutions.
 
I broke out of my AIB fixed rate just before Xmas. My fee was calculated at €2200. I agree with your frustrations with their "post / in writing only" rule - it ended up taking a few weeks to get it sorted. Glad I did it now though :)
 
David Dublin

Surely you could go in and collect the letter? then sign on the spot?
 
In a similar boat to many people on this thread. I fixed at 5.8% and am 8mths into the life sentence. I enquired with my my lender and was informed the penalty would be €24,000 to switch to variable. Unsurprisingly my response pretty much went...EH NO!

Trying not to get to bitter about it and taking solace in that;
  • If I were applying for my mortgage now it would be likely that I would either be refused or at best not offered the amount I needed.
  • I know there is another 1 or 2 more drops expected in the interests rates before the end of the year but it can only go so low and then the only way is up...maybe very quickly.
  • For all of us pining for the variable at the moment we could find ourselves 6/12/18 months down the line begging for the fixed.
  • In my case anyways...at least I know for the next 4ish years what I need to be budgeting.
This is what I keep telling myself anyways...helps a little....
 
My mortgage is crippling us. We owe €610,000 and we are stuck in a fixed rate. At the moment we are struggling to pay this as the government have taken extra €1000 per month off us in wage cuts. We were quoted €39,000 to buy out. Absolutely crazy. I will never again stay loyal to the EBS as they will be the cause of us losing our dream house. We only built it 1 and half years ago and we now have to consider putting on the market which in this current climate will not yield us enough to pay our mortgage and start again. I am heartbroken cause we are not extravagant people at all. No fancy hols or cars, just a nice home for a family but now we have been left stranded
 
in the formula posted earlier for KBC , the calculation of the break fund fee was outlined. I'm trying to determine how that break funding rate is determined and the document earlier in the thread shows the following example

b) where wholesale rate decreases over term of loan​
Wholesale rate at date of funding: 8%
Wholesale rate at switching date or redemption date: 7%
Break funding rate 1%​
Break funding fee (per​
​
​
​
1,000.00)
Formula: mortgage balance x break funding rate x (unexpired fixed term divided by 12)​

Example: 1,000.00 x 1% x 6 months /12 = 5.00 per 1,000.00

In the case were a person is breaking out of a 5 year fixed (say APR 4.89) with about 2 years remaining, what "wholesale rate at switching date" is used - a wholesale rate for 2 years fixed (or is it a rate for 5 years) ? Does anyone know where to find these rates on any given day?
 
Nalah said:
obviously a contract is a contract and all that..., but I'm considering making a lump payment off my FA Fixed Mortgage. If they try to impose a penalty I might point out that since I'm currently in negative equity they should be damn glad to get their book in order. Any thoughts on this strategy?
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Brendan asked me how I got on with this:

After a lot of calling and talking to junior staff who didn't know anything I was eventually told by First Active that I could pay 5% of original amount every year without penalty. I didn't proceed for various reasons so I don't know if that was strictly per calendar year or once every 12 months
 
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