Housefund123
Registered User
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Hi, do you have a very large mortgage balance? Interbank rates haven't moved a lot since May. AIB have a policy of using the nearest while year in calculating rates, so they'd compare the 2 year rate at drawdown to the 1 year rate now. But your mortgage balance must be close to 500k?Hi,
I read this thread and the outcome with great hope, I rang AIB last week to ask about changing from our fixed 2year rate of 3.6 % and get it to 3.2%. We got our letter which stated that it would cost us over €950 to break this.
We drew down in May, took 3 months off paying so we have just paid our second month mortgage.
I'm kind of disappointed not to get the outcome above but fair play for getting them to move you!
I might ring them again, see if they can do anything else.... It would mean having an extra €36 euro a month for us.
Thanks for posting the update. I have my fingers crossed for us!
Hi, do you have a very large mortgage balance? Interbank rates haven't moved a lot since May. AIB have a policy of using the nearest while year in calculating rates, so they'd compare the 2 year rate at drawdown to the 1 year rate now. But your mortgage balance must be close to 500k?
Thanks for your reply. We borrowed 155,000 from AIB so it's a very manageable payment to make monthly.
But we just wanted to see if we could avail of the lower rate after reading the other posters experience. And of course any savings we could make would be great.
I actually rang AIB yesterday to see if there was any moving to the 3.2% rate but no chance. Just being sent out a letter again with the break out fee (which I assume will be the same fee of €950).
26. (1) A consumer has a right to discharge fully or partially his or her obligations under a credit agreement prior to the expiry of that agreement. In such cases, the consumer shall be entitled to a reduction in the total cost of the credit to the consumer, such reduction consisting of the interest and the costs for the remaining duration of the contract.
(2) A creditor shall be entitled to fair and objective compensation, where justified, for possible costs directly linked to the early repayment, but shall not impose a sanction on the consumer, and any such compensation shall not exceed the financial loss of the creditor.
(3) Notwithstanding paragraph (2) and without prejudice to paragraph (4), a creditor’s entitlement to compensation under this Regulation shall arise only in the circumstances where the borrowing rate provided for in the credit agreement:-
(a) may not be changed, or
(b) may not be changed over a period of at least one year, or
(c) may not, for a period of at least five years, exceed the rate applicable on the date of the making of the credit agreement by more than two percent.
Yes, that's exactly the piece they are entitled to 'fair and objective' compensation for, and the reason I referred to interbank rates as a close proxy.What is if the bank itself has fixed-term refinancing with break fees attached?
Yes, that's exactly the piece they are entitled to 'fair and objective' compensation for, and the reason I referred to interbank rates as a close proxy.
Every bank with the exception of AIB and Dilosk refer to market rates in their breakage fee terms.
I don't believe AIB are compliant with legislation.
They are calculating the break fee incorrectly. They are not in compliance with the legislation as Red Onion has shown.
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