Limerickboy,

We just broke out of our AIB 3 year fixed rate mortgage, only 6 months into the term.

You need to check your general conditions for the formula for breakout cost but ours worked like this:

They charged us the difference between our fixed rate, and the 3 year fixed rate they were charging on the day we broke out (so we fixed at 5.25% and the rate the day we broke out was 5.20% so difference is .05%) multiplied by the balance of your term (in our case 2.5 years) multiplied by the balance of your mortgage (say €500,000) = €625.

I think at that price you would be nuts not to break out with interest rates coming down the way they are.

The only thing is, you need to move FAST! As interest rates come down AIB will probably drop their 3 year fixed rate, which will mean that the cost of breaking out will go up. For examply, if AIB dropped their 3 year fixed rate from 5.20% to 5.00% next week, the breakout cost on a €500K mortgage (as per example above) would go up to €3,125, which is a lot more intimidating.

So if you are going to breakout, do it quickly!!

By the way all they need from you to do the breakout, is a letter signed by you and your cheque for the breakout cost.

Best of luck,

Kate