friday2018
Registered User
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I'll try and keep this as brief as possible. I have 2 properties:
Property 1 - Tracker Mortgage with Ulster Bank. 15 years remaining and current balance of €150,000.
Property 2 - 10-year Fixed rate with BOI at 3.3%. 24 years remaining and current balance of €407,000.
I am selling the Property 1 and UB have agreed to transfer the remaining balance to property 2 at a rate of ECB + 2% and fund the remaining balance of circa €257k at a 5-year fixed rate of 2.5%.
Problem is BOI wrote to my solicitor this week and demanded a "Funding Fee" of €16,593. I rang today to query the charge and they told me it has now increased to €18,194. I asked for a breakdown of the calculation and the girl I spoke to said they would send out the method of calculation which was driven by the difference between the cost of the funds to them when they lent me the money and what they can achieve on the deposit market now. However, they would not be able to disclose to me rates they were using or their quantum.
I am only 1 year into the 10-year term and when I entered into the fixed rate agreement I read a lot of articles about the EU Mortgage Directive and how it would mean little or no breakage fees due to the low interest rate environment. Clearly, not so.
My questions are as follows:
1 My high-level understanding of the EU Mortgage Directive was to ensure that banks could only charge customers the cost to the bank of the customer breaking out of fixed rates. The formula used by BOI to me would seem unfair as their 10-year fixed rate is now 3.6% which means in essence they can now make a greater return on the funds repaid by myself. Is this formula used by BOI prescribed by the EU directive or is it BOI's interpretation of the EU directive?
2 As part of my mortgage offer I was entitled to 2% cashback. I would also been entitled to a further 1% cashback after 5 years (circa €4,000). Should this not be deducted from BOI's "loss" as they won't have to pay this as a result of me breaking out of the agreement?
3 What should my approach be with BOI if they are continue to refuse to provide the detail behind the calculations?
Thanks for any help!
Property 1 - Tracker Mortgage with Ulster Bank. 15 years remaining and current balance of €150,000.
Property 2 - 10-year Fixed rate with BOI at 3.3%. 24 years remaining and current balance of €407,000.
I am selling the Property 1 and UB have agreed to transfer the remaining balance to property 2 at a rate of ECB + 2% and fund the remaining balance of circa €257k at a 5-year fixed rate of 2.5%.
Problem is BOI wrote to my solicitor this week and demanded a "Funding Fee" of €16,593. I rang today to query the charge and they told me it has now increased to €18,194. I asked for a breakdown of the calculation and the girl I spoke to said they would send out the method of calculation which was driven by the difference between the cost of the funds to them when they lent me the money and what they can achieve on the deposit market now. However, they would not be able to disclose to me rates they were using or their quantum.
I am only 1 year into the 10-year term and when I entered into the fixed rate agreement I read a lot of articles about the EU Mortgage Directive and how it would mean little or no breakage fees due to the low interest rate environment. Clearly, not so.
My questions are as follows:
1 My high-level understanding of the EU Mortgage Directive was to ensure that banks could only charge customers the cost to the bank of the customer breaking out of fixed rates. The formula used by BOI to me would seem unfair as their 10-year fixed rate is now 3.6% which means in essence they can now make a greater return on the funds repaid by myself. Is this formula used by BOI prescribed by the EU directive or is it BOI's interpretation of the EU directive?
2 As part of my mortgage offer I was entitled to 2% cashback. I would also been entitled to a further 1% cashback after 5 years (circa €4,000). Should this not be deducted from BOI's "loss" as they won't have to pay this as a result of me breaking out of the agreement?
3 What should my approach be with BOI if they are continue to refuse to provide the detail behind the calculations?
Thanks for any help!