Key Post It may be much cheaper than you think to break out of a fixed rate early...

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Hello. Im with PTSB switching to AIB or Avant when i can.
Just Reading avants new rates Excited!
So iv over 5k built up in credit from overpaying. Now im looking to switch. Should i use that built up credit (use credit to cover next 3/4 months mortgage payments) to build up some savings over the next 4 months then switch, or let that credit there and it will come off the redemption figure switching. So i will be borrowing less from the new lender.
Help thanks.
 
Rationaleyes said:
33 years (and 8 months) out of 35. 510.20 a month is current repayment, but im looking to lock in a lower rate for a relatively long time
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If you go for the Avant 2.1% 10-year fixed rate, in seven years' time you will be worse off by about €1,300 versus going for their 1.95% 7-year fixed rate (but you will have the certainty of the 2.1% rate for ten years).

Regardless of which Avant rate you go for, the word in the other thread is that the €1,500 cashback is for applications submitted after 1 January 2022.
 
Interest% said:
Hello. Im with PTSB switching to AIB or Avant when i can.
Just Reading avants new rates Excited!
So iv over 5k built up in credit from overpaying. Now im looking to switch. Should i use that built up credit (use credit to cover next 3/4 months mortgage payments) to build up some savings over the next 4 months then switch, or let that credit there and it will come off the redemption figure switching. So i will be borrowing less from the new lender.
Help thanks.
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If your LTV is close to 80%, try to be as sure as you can be that you really are in the 70%-80% LTV bracket before switching. (You won't know for sure until Avant organises the valuation.) That might help you decide what to do with the credit.
 
Hi all, first time poster here. I have just switched mortgage from UB. I had a 4 yr fixed mortgage taken out in Aug 2018, end of fixed term was 30th Sep 2022. The mortgage switch drawdown went ahead on the 9th Dec, therefore there were 295 days left on the fixed term at time of drawdown. The outstanding balance on 9th Dec was €118,206.

Throughout the process I asked for UB to send me redemption break fees, I got one in March 2021, €1079, one in August, €766, and one on the 19th Nov, €517. I just found out off my solicitor that the redemption fee charged by UB was for €1,567!! My question is how on earth could rates have moved that much in 3 weeks, on the 19th Nov the break fee was €517, but by the 9th Dec the charged fee had jumped to €1,567??

My guess is that UB have charged me 6mths interest as the break fee? They say in T&Cs that early redemption should be the minimum of the amount calculated by formula or 6 mths interest. Maybe someone has made a mistake and just charged the 6mth interest? Could someone please tell me I'm not mad and that UB have made a mistake?
 
Paul F said:
@Ben1980 Did you ever request a break fee from UB before March 2021? If so, do you have a record of what it was?
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I think I may have asked for one the previous year as I was thinking of switching then but I didnt go through with it. I cant remember the amount though and not sure I have a letter from them. It seems very strange to me that the redemption fee amount went from 1079 in March, to 766 in Aug to 517 in Nov and then up to 1,567 on 9th Dec? Rates would have to have moved a huge amount in 3 weeks? As I said previously it looks suspiciously like they have applied 6mth interest as the break fee ( monthly interest was around 250 per mth), but of course this is just a guess on my part
 
Ben1980 said:
I think I may have asked for one the previous year as I was thinking of switching then but I didnt go through with it. I cant remember the amount though and not sure I have a letter from them. It seems very strange to me that the redemption fee amount went from 1079 in March, to 766 in Aug to 517 in Nov and then up to 1,567 on 9th Dec? Rates would have to have moved a huge amount in 3 weeks? As I said previously it looks suspiciously like they have applied 6mth interest as the break fee ( monthly interest was around 250 per mth), but of course this is just a guess on my part
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Yeah, there is no way that €1,567 is correct. Either your solicitor is reading things wrong or UB made a mistake.

What was your monthly repayment and interest rate with UB?
 
Paul F said:
Yeah, there is no way that €1,567 is correct. Either your solicitor is reading things wrong or UB made a mistake.

What was your monthly repayment and interest rate with UB?
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My monthly repayment was 1,871 and the interest rate was 2.6% 4yr fixed. I rang the bank and they confirmed the redemption fee amount was 1,567. But of course the helpdesk just read a figure on a page and don't have a clue how the redemption fee was actually calculated and what rates were used, all they would say to me is that rates fluctuate. I said, of course they do, but they don't fluctuate that much in 3 weeks, it would take an enormous shift for that to happen. The problem is how do I prove the bank made a mistake. If they made an error in the calculation and then post this calculation out to me, (which I've asked them to do) then how do I prove that the rates they used and/or methodology used were incorrect? I presume I will have to find the market rates on the 9th Dec and compare them to the market rates from Aug 2018? Could be difficult to get the bank to admit they were wrong here? Not sure if anyone else has been in a similar position with redemption break fee?
Thanks again Paul F
 
That's really strange!

Based on the ICE rates (which people here use as a proxy for the interbank rates), there were no large rate moves around the time you paid off your UB mortgage:
https://fred.stlouisfed.org/series/ICERATES1200EUR1Y

You would expect to see a huge downward spike around 9th Dec to explain your large break fee. To know for sure, we would need to see the actual interbank rates (not just a proxy).

See if you can find the break fee quote from last year. Let's hope UB simply used that one by mistake.

In all the times I have asked UB for break fee quotes, they have never sent me the actual interbank rates they used, only the formula. You may have to pester them to get those rates.

[Edit] Also call UB and ask them for a final statement for your mortgage account.

PS Does anybody here have access to Bloomberg Professional or similar, in order to see interbank rates?
 
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Paul F said:
That's really strange!

Based on the ICE rates (which people here use as a proxy for the interbank rates), there were no large rate moves around the time you paid off your UB mortgage:
https://fred.stlouisfed.org/series/ICERATES1200EUR1Y

You would expect to see a huge downward spike around 9th Dec to explain your large break fee. To know for sure, we would need to see the actual interbank rates (not just a proxy).

See if you can find the break fee quote from last year. Let's hope UB simply used that one by mistake.

In all the times I have asked UB for break fee quotes, they have never sent me the actual interbank rates they used, only the formula. You may have to pester them to get those rates.

[Edit] Also call UB and ask them for a final statement for your mortgage account.

PS Does anybody here have access to Bloomberg Professional or similar, in order to see interbank rates?
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Thanks again Paul. It's not much help if they send me the calculation. It not the rates used as I won't be able to prove anything then. I still think they've just taken 6 mths mortgage interest and used that as my break fee as it would be an easier explanation rather than them using completely incorrect mkt rates. Hopefully if I make a formal complaint then I can speak to someone and get my point across. It may be difficult to proof their error if they don't provide me with the rates they used. But surely they will admit that it's strange that the break fee trebled in just 3 weeks!!
 
Can someone please calculate my break Fee.
PTSB.
3Yr Fixed
Exactly 1.26 yrs into 3 yr fixed
Rate 2.95%
Outstanding balance 238.5K
 
Financequery said:
Thanks Paul. Has Avant said anything about the 1.5k cashback for switchers at those other than UB and KBC?
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The word on this forum is that the cashback is only for UB and KBC customers.

Strangely, bonkers.ie had an article about it about two weeks ago but they have taken it down now. But here is :
The credit card provider turned mortgage lender is now offering cashback to the tune of €1,500 to customers looking to switch their mortgage from either Ulster Bank or KBC.
[...]

Those looking to switch, from Ulster Bank and KBC for example, must do so between January 1st and March 31st 2022 to qualify for the cashback deal.

The cashback incentive also only covers plain mortgage switches, in other words, applicants must not be looking to borrow extra money.
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I haven't seen any official announcement of the cashback offer, though, so treat all of the above cautiously.
 
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