AIB charging me a €950 break fee

Discussion in 'The Fair Mortgage Rates Campaign' started by Housefund123, 1 Nov 2017.

  1. gobbomincer

    gobbomincer Registered User

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    I am, I will keep you posted
     
  2. Housefund123

    Housefund123 Registered User

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    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!
     
  3. gobbomincer

    gobbomincer Registered User

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    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.
     
  4. Barry89

    Barry89 Registered User

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    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.
     
  5. RedOnion

    RedOnion Frequent Poster

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    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.

    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.
     
  6. Barry89

    Barry89 Registered User

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    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.
     
  7. RedOnion

    RedOnion Frequent Poster

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    You've under 60% LTV, so lots of options to switch.
    If break fee is under 15k, you'd save money switching.
     
  8. Gedamski

    Gedamski New Member

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    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€.
     
  9. RedOnion

    RedOnion Frequent Poster

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    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.
     
  10. Sean Og

    Sean Og Frequent Poster

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    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.
     
  11. Gedamski

    Gedamski New Member

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    Hi Red Onion, I fixed it 2 years ago September 2016 for 5 years. Approx 122,000 balance fixed at 3.8%.
     
  12. RedOnion

    RedOnion Frequent Poster

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    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.
     
  13. Gedamski

    Gedamski New Member

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    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?
     
  14. RedOnion

    RedOnion Frequent Poster

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    @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.
     
    mugsymugsy likes this.
  15. Gedamski

    Gedamski New Member

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    Thanks very much. I'll do that.