breaking out a fixed rate mortgage

David_Dublin

Frequent Poster
Messages
460
I was quoted 7,222 by AIB as of today, dont have that kind of money hanging around. It took them over a week to get the quote to me so clearly they are receiving one or two other requests like this.

Mf - what was I that Dellboy used to call Rodney?
 

happygoose

Registered User
Messages
35
I just used Karl's mortgage calcuator to work out what switching to a variable rate would save me - €200 a month - from switching from a 5.44% fixed to a 3.68% variable...

..only problem is that I'm with EBS :(

I'll send them a letter anyway!
 

Grovegirl

Registered User
Messages
15
E-mailed chief exe of ebs in relation to charging breakage fee when others are not.... still waiting for response! Just found out today that IIB are not charging breakage fee. Will defo change mortgage provider when finished fixed rate if I get no where with EBS but I will keep trying. I think in current climate when we are all taking a pay cut the banks should be more understanding. I'm not asking them to cancel my debt!!
Where did you hear that IIB are not charging the breakage fee??

I've been quoted €20k to get out of my fixed rate from them last week!!
 
B

Bright Star

Guest
Hi all,

I have just joined this website as i have found comments very Interesting. I am with EBS also and had meeting with Manager last week on the issue of breaking out of a Fixed Rate. I have 5.2% (2.5 Years Left) on a 3yr Fixed. He quoted me €15,500 to break it!!!!!!!!!! Ill nearly passed out there and then as i had heard that a number of people are able to do this breakage with no penalty with PTSB and the likes??? What is the deal with EBS!! I could be saving €405 per month in interest on mine. :mad: I know its my own fault--i did sign up for it..but given our current economic state..things are getting very tight and any saving will help and €405 is nothing to turn your nose up at.
Do u think emailing Exe of EBS might get us some response???
 
F

foo

Guest
I read on another web site about IIB not charging breakage fee. Maybe letting some people break and not others. Still no reply from EBS. Next move is to ask for copy of contract I signed as I have no copy and a detailed quote of how they come up with fee.
 

dubrov

Frequent Poster
Messages
134
learly the reason why some banks are letting some people out of their fixed rates for free and not others is down to the terms of there mortgage.

Banks will only let you out if it is in their benefit.

e.g. You have a 35 year mortgage on a 3 year fixed at 5.05% which rolls to a tracker, say ECB+0.75% afterwards. I'm sure the banks are begging people to switch to a variable rate. The mortgage holder saves a bit for a couple of years but ends up paying much more for the remaining 32 years of their mortgage as Variable rates are currently way above the tracker rate and will ontinue to be so for the forseeable future. You can switch banks but since the credit runch no other bank will offer anything close to ECB+0.75%.

Bottom line is banks will only let you switch for free if they feel they are making money.They basially value your mortgage on your current deal, revalue it on the switch and if the switch is worth more to them they will offer it for free.

Just make sure to read your ontrat thoroughly and make sure they explain all the differences between your current and proposed mortgage contract
 

Dinarius

Frequent Poster
Messages
416
Chrisboy (post #9),

I note that you're with AIB and got out of a fixed without penalty. How?

We're on a five year fixed ending November 2011.

Right now we owe €267k paying €1963 per month.

We want to add about €150k after extending the house. So, total borrowings then will be about €400-420k.

Breakage cost at the moment is nearly €7k.

We are cast iron, credit wise. Can we negotiate this? After all, we could say OK, we'll pay the €7k to close out, but we'll take the €400k elsewhere.

Any suggestions?

Thanks.

D.
 

dubrov

Frequent Poster
Messages
134
Dinarius, I think I remember from my mortgage contract that the calculation is set in stone. I think it is defined by the regulator.

I also saw this post which provides some more detail.

http://www.askaboutmoney.com/showthread.php?p=749000

Seeing as you have about 3 years left, you're basically looking at the difference between your current rate and AIB's current 3 Year fixed rate over the next 3 years.

Zoo_lander, generally they say in the offer how long it is good for in an offer letter. If the drawdown was before the expiry of the offer then I think the ombudsman will back you up. I'd be careful messing with your credit rating though. It might have implications that you weren't aware. THe bank definitely won't repossess if you continue paying off at the 5.05% level but remember the anything you don't pay will just be added to the debt.
 

chrisboy

Frequent Poster
Messages
684
Chrisboy (post #9),

I note that you're with AIB and got out of a fixed without penalty. How?

We're on a five year fixed ending November 2011.

Right now we owe €267k paying €1963 per month.

We want to add about €150k after extending the house. So, total borrowings then will be about €400-420k.

Breakage cost at the moment is nearly €7k.

We are cast iron, credit wise. Can we negotiate this? After all, we could say OK, we'll pay the €7k to close out, but we'll take the €400k elsewhere.

Any suggestions?

Thanks.

D.

Hi, i'm not a 100% sure why i didnt have to pay a penalty, the only thing i can think of, was i rang them to get it put on fixed rate, then sent in a written request which was accepted, but i never sign a contract to put me on fixed rate, so nothing was in writing except for my request.. Not sure if this is the reason, maybe someone could confirm this could be the reason..
 

David_Dublin

Frequent Poster
Messages
460
I got out of mine for no penalty.. Was fixed at 5.18%, now on the aib variable..
How did you go about it. What term was left on your fixed rate and what rate was it at. I'm with AIB too and I was quoted over 7K, I wonder are they making arbitrary decisions or are your circumstances different than mine or something. Thanks.
 
C

CL32

Guest
Hi all.

I have about 3 years left on a fixed term with EBS. When this term is up will I automatically revert to the tracker I was on before, or will they try and switch me to a variable rate?
 

NorfBank

Frequent Poster
Messages
2,103
Depends on what it says on your loan offer. It will say whether you revert to a tracker or variable rate.
 
T

tw0nk

Guest
Just got off the phone from ptsb and as of yesterday 11/2/09 they have "withdrawn the option for customers to change from fixed to variable rate mortgages".

Discussed my options with him and he said they offer 3 month moratoriums and interest only periods on mortgages but no way of going to variable/lower rate.

Only option to go to lower rate looks to be switching mortgage providers for ptsb customers, anyone have any idea of a way to find out costs of this without ringing up several banks?
 

PaddyW

Frequent Poster
Messages
1,270
You'll have to find out from PTSB how much it is to break your fixed rate first. If you can afford this then you can switch your mortgage provider after. Some banks will pay legal fees for you.
 

Watcher

Registered User
Messages
45
I'm on a 2 year fixed at 4.75% with PTSB. I rang them about 2 weeks ago and asked could I move to variable. They agreed and moved me once I sent it in writing within 20 days.
Now that Im on variable I have a meeting with AIB to discuss transferring to them.
 

NorfBank

Frequent Poster
Messages
2,103
I'm on a 2 year fixed at 4.75% with PTSB. I rang them about 2 weeks ago and asked could I move to variable. They agreed and moved me once I sent it in writing within 20 days.
Now that Im on variable I have a meeting with AIB to discuss transferring to them.
Just be careful that your fixed rate doesn't revert to a tracker rate at the end of the fixed rate period.
A bank doing something for free sounds fishy.
Call me cynical.
 

PaddyW

Frequent Poster
Messages
1,270
I agree with Norf. Wasn't aware that my fixed rate would revert to variable at end of fixed term until I read the T&C's. Have a look through them, if you have them. If not get a copy off the bank.
 

Maximus152

Frequent Poster
Messages
173
I agree with Norf. Wasn't aware that my fixed rate would revert to variable at end of fixed term until I read the T&C's. Have a look through them, if you have them. If not get a copy off the bank.
Why would it not revert back to a variable, the Fixed rate term is over so only other way is to revert default variable..? I am missing something here, I assumed we are variable unless we request fixed.
 

NorfBank

Frequent Poster
Messages
2,103
I think PaddyW meant his reverted to a tracker? Some older fixed rates reverted to a tracker while some revert to a variable rate. It may be better to take the hit now of a fixed rate for the benefit of a tracker in the future.
 
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