Breakage Cost enquiry

Storyman

Registered User
Messages
5
I am currently with Ulster Bank fixed until 2023 at 2.99%, however I want to take advantage of the cash back offers from other banks. Ulster Bank have told me that it will cost €2758 to break the terms of the mortgage. However they will allow me to switch to a variable rate mortgage of 3.6% and it won't cost me anything to switch. My question is if I was to switch to the variable rate for a month or two could I then switch banks without a breakage cost as the mortgage would not be fixed anymore? Does anyone have experience of doing this?
 

Coldwarrior

Frequent Poster
Messages
170
Haven't heard of them waving the breakage fee before, presumably though if you're on a variable rate you can then switch away freely. Seems odd though, we'd all do this to get out of the fixed rates and avoid the breakage if it was available.

Did you ask about switching to the variable or did they bring it up? Just wondering as I inquired about breaking with UB recently (with the intention to re-fix) and there was no mention of moving to the variable.
 

Storyman

Registered User
Messages
5
I didn't discuss it with them. I rang and asked for the breakage cost and they sent me a letter with all the different rates that were available both the fixed rates and variable rates. Beside each rate there is a column with the monthly repayment for that rate and another column beside that gives the breakage cost based on 6 months interest if I was to switch to that option. Any of the lower rates than the rate I'm currently on have a breakage cost however beside any of the higher rates it just says N/A, this includes variable rate options.
 
Last edited:

RedOnion

Frequent Poster
Messages
3,288
Ah, now it makes sense.
That's not your current break fee. It's the maximum break fee you'd ever have to pay on that option if you switch to it (6 months interest).
You should have received a separate letter with the actual break fee.

I've no idea why they make it so complicated.
 
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