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

86Crate

New Member
Messages
2
Thanks RedOnion. Really appreciate the assistance. I'll get in touch with them closer to new rates kicking in, but wanted to get an indication as to what it would look like, as the formula they provide isn't hugely straightforward!

Where's the best source to get those rate percentages? (for the 0.13% drop)
 

SPD123

New Member
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2
Lender: KBC
Value of property: €525,000
Mortgage balance outstanding: €380,000
Date of fixing: March 2018
Period fixed for: 3 years
Fixed rate: 2.9%
Term left: 2.5 years

A few days ago I was quoted a breakage fee of €625 in relation to the above, which is valid for another week. I was wondering if this fee seems right. I have looked at interbank rates since I last fixed, and they seem to have risen. In March 2018 they were -0.329% and they are now -0.321%. If rates have increased, how is the quoted breakage fee reasonable?
 
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SPD123

New Member
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2
Thanks RedOnion. I have just looked at the 3 year swap rates and they seem to have fallen by 0.075% in that period. So that breakage quote is probably right. KBC's new fixed rates do not come in to effect until 3rd September. Is it worth breaking now and going on the variable rate (3.05%) for a month before fixing again. Or should I take my chances and see what the breakage fee is in early September. I know future rates are impossible to predict with certainty, but what are the chances of the breakage fee being less in 6 weeks time?
 

RedOnion

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3,288
It's impossible to predict short terms moves in interest rates - you're talking about a drop of 0.01% increasing break fee by more than the cost of moving to variable rate for 6 weeks.

Each 0.01% increase in rate reduces your break fee by 95 euro.

If you want certainty, break now. Have your valuation ready to fix as soon as rates are available.
 

Dubwoman

New Member
Messages
3
Hi Brendan

Thanks for all the info in this thread. I rang AIB today and this is our situation

Lender: Aib
Rough value of property: €500k
Total amount borrowed: €357
Amount of mortgage balance outstanding: €317,000
Date you fixed: feb 2015
Period for which you fixed: 5 years
Fixed rate: 3.9%
Term left: 15 months
Breakage fee quoted: waiting for figure as they said would take 5-7 days

The LTV seems favourable too as would bring us into the 50-70% category the rate for that is 2.9%
Would you recommend breaking and trying to do LtV now which property value is so high now waiting until February until the fixed rate is finished?

Thanks
 

RedOnion

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3,288
@Dubwoman
AIB will quote you a break fee of about 2,700.

So long as you move to a rare below 3.2%, you will save money over the remaining 15 months.

Did you fix on drawdown, or were you on a variable rate initially? If you were ever on an LTV rate, they might not let you change bands.

Would you move to another lender and get a better rate?
 

Sean Og

Frequent Poster
Messages
170
Why not go for the triple switch cash back Bonanza on offer with EBS, PTSB and BOI. 2% of 317k is €6340 cash back a time less valuation fee and legals so at least €5000 profit.
 

Dubwoman

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3
I’d love to switch provider tbh but we are now down to one income because I am at home with small kids at moment. So I presumed we would not be accepted by a different lender as his income wouldn’t qualify for 317 if they make you apply again. Or maybe I am wrong on this ?

I fixed on drawdown to a three year fixed rate between 2010-2013 and I think we may have stayed variable till 2015 when we locked into this five year rate which expires in February 2020. I definitely didn’t do LTV yet. Do you know if the breakout fee can be added to the mortgage balance rather than paid as a lump sum with aib
 

smithers

Registered User
Messages
47
Can anyone tell me whether this break fee sounds correct? @RedOnion could you help? I know i should never have signed up to this mortgage, hindsight eh!

Lender: PTSB
Total amount borrowed: €163,138
Date you fixed: March 2011
Period for which you fixed: 10 years
Fixed rate: 4.5%
Term left on fixed rate: 26 Months
Breakage fee quoted: 11970.00 :(

I have an over payment of 56420 (it's a credit on the account) so the actual amount I owe is 106400 but i know they use the figure before the credit in their calculation.

Any help appreciated!:)
Thanks in advance
 

RedOnion

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3,288
@smithers
Unfortunately it looks correct.
You need to compare the 10 year rate in 2011, with the current 2 year rate.
The calculation they have suggests a 3.4% difference which looks correct.

I'm going to send you a PM to check something that might work in your favour.
 

Alpha20

New Member
Messages
9
Hi,

I am in a fixed rate of 3.7% for 7 years with UlsterBank, Looking at their current fixed rates i decided to get the breakage fee and rate sheet to see what my options are as i am probably paying about 1K more a year than i need to be, money is tight at the moment and any saving will help, to be honest the breakage fee @ €1783 is even hard to come up with!

Lender: UB
Rough value of property: €210k (bought for 190K in March 2014)
Total amount borrowed: €170K
Amount of mortgage balance outstanding: €155,092
Date you fixed: March 2016
Period for which you fixed: 7 years
Fixed rate: 3.7%
Term left: 4yrs (31-03-2023)
Breakage fee quoted: Several ranging from €1783 to €2551, but lowest fix rate is for 2 years fixed @2.3% Fee: €1783.56

What interested me in that the letter has loyalty offer on it of SVR -1.20% for LTV <60% @ 3.10% with no breakage fee listed against it.

Does anyone know if i took the discounted SVR rate now, could i then fix it immediately or shortly afterwards for 2 or more years (likely 4 years @ 2.6% offer seems good), is this a way of avoiding paying the breakage fee?

Thanks!
 

RedOnion

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3,288
Breakage fee quoted: Several ranging from €1783 to €2551, but lowest fix rate is for 2 years fixed @2.3% Fee: €1783.56
That's not the break fee. It's the maximum break fee they will charge you in future (6 months interest).
They should send you a break fee separate to the rate sheet - call them if you don't have this.
 

Alpha20

New Member
Messages
9
Thanks @RedOnion, the paperwork states its the Breakage cost based on 6 months interest!

It states that " The following are the range of options available for you to choose from. These quotations are based on your outstanding balance and remaining term"
Sorry cant post links yet for the image of the first offer!
 

RedOnion

Frequent Poster
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3,288
No, you have misread it.
To break your current fix, there is only 1 break fee amount, regardless of what option you choose.
 

Alpha20

New Member
Messages
9
Ah @RedOnion I see my mistake now! I'm a pretty clever person but this crap always confuses me! Paperwork does not state any breakage fee for my current Rate of 3.7%, I specifically requested it on the phone last Friday and was told they couldn't give it to me over the phone and would send it out, they took a week to send out the Current rates available to me! Offers are only valid for 10 days according to the letter, it'll be that before they send me the breakage fee probably! I'll get back onto them!
 

RedOnion

Frequent Poster
Messages
3,288
@Alpha20 it's not you - their letter is very confusing.
Once they've generated the break fee calculation, they should be able tell you over the phone what it is.
 

Anthony7

Registered User
Messages
5
Thanks @RedOnion, just home and the letter was waitinh for me €2158 to break out iif my current fixed rate!
Not sure if this helps but I had a very similar amount and dates with UB.

190k borrowed with UB. 7 year fixed on 3.7% First drawdown was in June 2016. I called UB bank in nov just gone. Was expecting a hearty breakage fee but they quoted me €0. Moved immediately to 2.3% fixed for 2 years.
 
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