This applies specifically to AIB, and not EBS / Haven.
If anyone has followed my posts on fixed break fees, you will know that AIB calculate fixed break fees different to other lenders. I have a different interpretation of legislation than they have, but there are some scenarios where it works in customers favour.
An interesting question was asked last week from a poster who is on a 3 year fixed rate with AIB (fixed after rate reduction in September). They wanted to break and fix for a different term. My advice was AIB cannot charge a break fee, following their own rules.
Explanation:
AIB fixed rates are currently:
1 year: 3.2%
2 year: 3.2%
3 year: 3.2%
Because AIB base their fixed rate break fees on the difference between the rate customer is on, and the rate AIB can charge for the remaining term, it means that they cannot charge a break fee for someone who fixed for 2 or 3 years since the last rate change in September, unless they reduce the interest rates for shorter terms.
For example if someone fixed for 3 years, they are paying 3.2%. They request break fee. AIB look at 2 year rate, which is 3.2%, so there's no break fee.
This applies to breaking interest rate to switch to variable, or to make an early repayment. So if, since September, you fixed for 2 or 3 years, and now regret it, or want to make overpayments, you should be able to break for free.
Please post if you've been quoted a break fee, in the circumstances above. Either zero or otherwise so we can confirm this practice.
If anyone has followed my posts on fixed break fees, you will know that AIB calculate fixed break fees different to other lenders. I have a different interpretation of legislation than they have, but there are some scenarios where it works in customers favour.
An interesting question was asked last week from a poster who is on a 3 year fixed rate with AIB (fixed after rate reduction in September). They wanted to break and fix for a different term. My advice was AIB cannot charge a break fee, following their own rules.
Explanation:
AIB fixed rates are currently:
1 year: 3.2%
2 year: 3.2%
3 year: 3.2%
Because AIB base their fixed rate break fees on the difference between the rate customer is on, and the rate AIB can charge for the remaining term, it means that they cannot charge a break fee for someone who fixed for 2 or 3 years since the last rate change in September, unless they reduce the interest rates for shorter terms.
For example if someone fixed for 3 years, they are paying 3.2%. They request break fee. AIB look at 2 year rate, which is 3.2%, so there's no break fee.
This applies to breaking interest rate to switch to variable, or to make an early repayment. So if, since September, you fixed for 2 or 3 years, and now regret it, or want to make overpayments, you should be able to break for free.
Please post if you've been quoted a break fee, in the circumstances above. Either zero or otherwise so we can confirm this practice.
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