AIB charging me a €950 break fee

gobbomincer

Registered User
Messages
3
@Housefund123 & @gobbomincer I would strongly recommend you take this to the FSO for resolution. AIB appear to be the only bank calculating it differently to everyone else and they should be held to account on this practice. You can also claim the loss in the rate from what you wanted to break until the fixed period expired.

Its a straight forward enough complaint - backed up by regulation and standard practice, and therefore should be a relatively easy one to submit and get a judgement on, and its likely the bank may have to change their practice as a result

Go for it !
I am, I will keep you posted
 

Housefund123

Registered User
Messages
8
I'm also sending mine in. I haven't found the time to sit down and finish my complaint but will be completed by the end of the week.

I'll update if/once I hear anything back. Thanks for all the help so far!
 

gobbomincer

Registered User
Messages
3
I can't see myself getting anywhere with this, how long does it normally take? AIB even told me how to complain to the omdudsman.
 

Barry89

Registered User
Messages
2
Hi

Just enquiring regarding my mortgage, in February 2011, we fixed our mortgage with PTSB for 10 years at a rate of 6.1%; repayments were nearly €1800 a month. In December 2015 we had to restructure our mortgage to reduce the monthly repayments which are now €1453 a month and this also added over 4 years to the term of the mortgage, but we are still fixed at 6.1% on the new repayments till 2021. I enquired about breaking out of the fixed rate early also about two years ago and they said it would cost over €20,000.

Is it possible to switch to another bank and get a better rate when still in fixed term and was the breakage fee they quoted me correct.
 

RedOnion

Frequent Poster
Messages
3,047
Is it possible to switch to another bank and get a better rate when still in fixed term
You'll need to break out of fixed rate with current lender to do so. New lender might include break fee in balance they will take in.

was the breakage fee they quoted me correct
Would need to know your balance to attempt to calculate.

In Feb 2011 the 10 year rate was over 3.2%. it dropped to zero mid 2016, so depending on timing it could have been a hefty break fee.

They would calculate based on remaining term, and 3 year rate is still around zero.

Ballpark, I think you'd need to get a rate of 3% or less and you'd save money by oaypay the break fee and switching. But would need exact details - I'd start by asking for an updated break fee. Then post your details if you want help finding the best mortgafe rate.
 

Barry89

Registered User
Messages
2
RedOnion, thanks very much for the quick reply.

€148,000 is the outstanding balance, original mortgage was €268,000. house value about €250,000 maybe €260,000 now.

I will request a updated break fee from PTSB

thanks again.
 

RedOnion

Frequent Poster
Messages
3,047
You've under 60% LTV, so lots of options to switch.
If break fee is under 15k, you'd save money switching.
 

Gedamski

New Member
Messages
4
Hey guys, new to this blog post but I just wanted to see if anyone has heard anything back about whether or not AIB are calculating the breaking fee in accordance with the legislation? I have just been hit with a breaking fee of 1400€.
 

RedOnion

Frequent Poster
Messages
3,047
Hey guys, new to this blog post but I just wanted to see if anyone has heard anything back about whether or not AIB are calculating the breaking fee in accordance with the legislation? I have just been hit with a breaking fee of 1400€.
Have you got details: balance, when you fixed, at what rate, for how long etc.

I'll try calculate which basis is more favourable for you, and then you can decide if you want to lodge a complaint with them.
 

Sean Og

Frequent Poster
Messages
140
Hi

Just enquiring regarding my mortgage, in February 2011, we fixed our mortgage with PTSB for 10 years at a rate of 6.1%; repayments were nearly €1800 a month. In December 2015 we had to restructure our mortgage to reduce the monthly repayments which are now €1453 a month and this also added over 4 years to the term of the mortgage, but we are still fixed at 6.1% on the new repayments till 2021. I enquired about breaking out of the fixed rate early also about two years ago and they said it would cost over €20,000.

Is it possible to switch to another bank and get a better rate when still in fixed term and was the breakage fee they quoted me correct.
Barry if you look at some of my posts on the Double switch discussion you will see that i was on 5.5% fixed with EBS for 10 years from 2011. It cost me €24,000 breakage fee but worth it. I have switched twice and the third one about to go. I have a mortgage of €300k so €6000 cash back with PTSB, BOI , AND EBS. Also going to KBC for €3000 so by the end i will have €21,000 less my legal fees and will probably go to Ulster bank for a rate of 2.4%. Massive saving from 5.5% OR 6.1% in your case.
 

Gedamski

New Member
Messages
4
Hi Red Onion, I fixed it 2 years ago September 2016 for 5 years. Approx 122,000 balance fixed at 3.8%.
 

RedOnion

Frequent Poster
Messages
3,047
Hi Red Onion, I fixed it 2 years ago September 2016 for 5 years. Approx 122,000 balance fixed at 3.8%.
Sept 2016 the 5 year interbank rate was negative. The 3 year rate now is positive. If it was any other bank, there would be no break fee.
 

Gedamski

New Member
Messages
4
Thanks for the info, should I ask the bank to show me how they are calculating the fee etc before I can proceed with a complaint? Is there anything I should be doing before I escalate it to the ombudsman?
 

RedOnion

Frequent Poster
Messages
3,047
@Gedamski

Ask the bank to provide you with a written quote, including all assumptions used as you are entitled to receive under Mortgage Credit Directive.

Once you have that, lodge a complaint on the basis that you are being charged more than the financial loss being incurred by the Bank, which you believe is in contravention of the Mortgage Credit Directive.

Only after they have responded to complaint can you go to FSO.
 
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