mortgagebreaker
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I cannot see how your break fee has been virtually unchanged over recent months given that wholesale interest rates have been increasing so much. Ask KBC for another break fee quote and please ask them to show their calculations (including "cost of funds" and "cost of breakage") when providing the quote.I'd love to know what my break fee should be. I have called KBC in Jan, Feb, March and again today and it was virtually unchanged each time. I was hoping it would be near zero based what I have been reading here and elsewhere about the increase in market interest rates since Jan.
My estimate of your current break fee is €520 at the moment but take that with a pinch of salt. (Can you give the dates and amounts of your recent break fee quotes?)
- Current lender KBC
- Outstanding mortgage balance (how much you still owe) 280,000
- Approximate value of your property 360,000
- The date you started your fixed-rate mortgage (month and year) November 2018
- How many years you fixed for 5 years
- Your current mortgage interest rate 2.6%
- Your current monthly repayment (excluding any overpayments) 1280
- Your property's BER (Building Energy Rating) – estimated if necessary D3
- Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much and when? No.
I cannot see how your break fee has been virtually unchanged over recent months given that wholesale interest rates have been increasing so much. Ask KBC for another break fee quote and please ask them to show their calculations (including "cost of funds" and "cost of breakage") when providing the quote.
My estimate of your current break fee is €520 at the moment but take that with a pinch of salt. (Can you give the dates and amounts of your recent break fee quotes?)
They have been drifting downwards, it was over 3,000 in January, maybe it was 3,300 or 3,500. Each month is has only gone down by a little bit, and it was always so high that I didn't take note because I was never going to break at that cost. But as the term and the capital has been reducing, it would be expected to drift down even if the rates where stable. I was just expecting to have reduced even more with the market interest rate changes recentlyThe cost of funds looks about right (see the 5-year swap rate in Nov 2018). But I can't see how the cost of breakage is -0.36% (see the 2-year swap rate for recent weeks/months).
The problem in all this is that KBC use a different rate in their calculation – possibly EURIBID – and we don't have access to that. But I wouldn't have thought that any rate of this type has stayed stable over the last three months, which is what is implied by your break fee quotes being virtually unchanged over the space a few months.
Do you remember if your recent break fee quotes have always drifted downwards? Or did they go up a bit sometimes?
It makes sense that the break fee would have been around €3,300 to €3,500 back in January, but it's hard to see how it hasn't fallen a lot since then, as you say.They have been drifting downwards, it was over 3,000 in January, maybe it was 3,300 or 3,500. Each month is has only gone down by a little bit, and it was always so high that I didn't take note because I was never going to break at that cost. But as the term and the capital has been reducing, it would be expected to drift down even if the rates where stable. I was just expecting to have reduced even more with the market interest rate changes recently
I can think of two explanations:
I don't know how to figure out which of these explanations is correct (or if there is another explanation). Any thoughts, anyone?
- KBC used the correct cost of breakage in January but have forgotten to update it in subsequent calculations
- KBC uses a reference rate for their cost of breakage that has been bizarrely (almost) unchanged over the last three months
Date | Fee |
---|---|
26-JAN-22 | 3,012 |
14-MAR-22 | 2,901 |
12-APR-22 | 2,840 |
On the last call I made to KBC, they told me to ring at the start of the month for a breakage fee. He believed the fees are cheaper at the start of the month. I'll try that in May.
I resurrected this old thread because I'm trying to figure out if KBC could have hedged their lending/borrowing rates in some way, and if so their "cost of breakage" would only change every time they hedge.It seems as though my break fee has been going down only because the number of months remaining in the fixed term is decreasing. I am not sure if I have seen any impact of volatile market rates in any of the break fee quotes that I have gotten from KBC.
They have always been able give it over the phone, including any of the finer details such as the figures used in the calculations. AFAIK that is the only way to do it and it's the same process as getting it posted out - you have to call and be put through to the mortgage team in both cases.Other people here seem to get the break fee over the phone without too much difficulty. @mortgagebreaker, @boconaill Any advice?
They can give you a break fee quote over the phone.once I have the KBC break fee I'll post it here.
I rang and they said they needed a few days (3-5 days) and would call back, it was same when I rang in January as well.They can give you a break fee quote over the phone.
I rang again Friday and was told it can be up to 10 days.They can give you a break fee quote over the phone.
@Thrifty_Fifty, @mortgagebreaker, @boconaill and @manion It is probably a good idea to request an updated break fee from KBC. I would be grateful if you could post it here when you receive it.
Great!@Paul F I have just been quoted €0 over the phone. In mid April it was €2,900!
Great!
It is important that anybody who received a break fee quote from KBC in the last few months (that they are not happy with) request an updated one.
My assumption is that they post out redemption fee/amount and a breakage fee can be provided over the phone. On Tues I requested a redemption fee hence they posted it. Today I asked for the breakage fee from Tuesday's request, she said it wasn't allowed over the phone. I asked her to calculate the breakage fee as of today then I got a fee of 2,786.82.@mortgagebreaker and @boconaill Can you each share the KBC phone number and department you called to get your break fee quote? As I understand it, mortgagebreaker was given theirs immediately over the phone (I could be wrong), whereas boconaill had to wait. Why the difference?
You both fixed at approximately the same time (November 2018) for 5 years. It will be very weird if boconaill is quoted a high break fee while mortgagebreaker's is zero.
@Paul F I have just been quoted €0 over the phone. In mid April it was €2,900!
I deduce from this that KBC did not update theI asked her to calculate the breakage fee as of today then I got a fee of 2,786.82.
Purely out of interest, last week (29th April) I requested a redemption fee and the breakage fee was 2,786.82 also. No change in a week.
M
("cost of breakage") in their break fee formula between last week and today. (They didn't update the A
or the T
either, but that is understandable.)We use cookies and similar technologies for the following purposes:
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