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

Alpha20

New Member
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9
Lucky you @Anthony7 I'm being quoted €2158, can't imagine between March and June 2016 the interbank rate changed that much, maybe something to do with mine initially been drawn down in 2014 and I fixed again in 2016?
 

RedOnion

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3,288
@Eoghan
Thanks - I knew this came up before, but I couldn't remember who.
The letter is obviously not clear enough.

can't imagine between March and June 2016 the interbank rate changed that much,
It was more to do with when he broke. Anthony broke in October, and interbank rates have tanked since - flight to safety on back of stock market falls, and signs from Europe that rates aren't going to increase anytime soon.
 

Alpha20

New Member
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9
@RedOnion As far as i can see the interbank rate only dropped by 0.01% since October 2018, figures i looked up were -0.21% in March 2016, -0.318% in October and -0.308% in January 19. Ref: tradingeconomics com
 
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RedOnion

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3,288
@Alpha20
You need to compare 7 years rate in Mar 2016, to the current 3 year rate (remaining term)

It looks a bit high. Should be 155k X 0.4% X 3 years

0.4% is a quick estimate - I can't access exact interbank rates at the moment
 

Alpha20

New Member
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9
4 Years left on my current Fixed rate so that would make it about right, 155k x 0.4% x 4 = 2480, I have edited my other post to remove the erroneous calculations.

7 year rate on 31st Mar 16 was 0.225 and 4 year rate 15th Feb 19 was 0.03 (theice_com_marketdata_reports_180), so on my calculation i got ~€918 breakage fee.
 

RedOnion

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3,288
4 Years left on my current Fixed rate so that would make it about right, 155k x 0.4% x 4 = 2480, I have edited my other post to remove the erroneous calculations.

7 year rate on 31st Mar 16 was 0.225 and 4 year rate 15th Feb 19 was 0.03, so on my calculation i got ~€918 breakage fee.
I'll check interbank rates later for you. On mobile at moment.
 

Okokokoknic

Registered User
Messages
7
Lender: BOI
Value of property: €400000
Mortgage balance outstanding: €315000
Date of fixing: June 2018
Period fixed for: 1 years
Fixed rate: 3%
Fixed Term left: 4 Months
Breakage fee quoted - €190.

Was quoted 135 a month ago
 

yupyaboyo

Registered User
Messages
17
Lender: BOI
Value of property: €530,000
Mortgage balance outstanding: €360,000
Date of fixing: Oct 2018
Period fixed for: 1 years
Fixed rate: 3%, offering 2.9% for remaining 6 months
Fixed Term left: 7 Months
Breakage fee quoted - €230.
 

Castaway

Registered User
Messages
10
Hi,

I am in the process of selling my house with a proposed closing date of 24th May’19.
My mortgage with UB is fixed until July’19. I understand their will be a breakage cost. The sale proceeds will clear the mortgage balance in full.

My question is will I wait until my solicitor is redeeming the mortgage to break the fixed rate or should I request the breakage now? I am afraid it will delay the process if left until later...
 

RedOnion

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3,288
@Castaway
Just wait, your solicitor will request a redemption figure close to the close date and it will include a break fee. It'll be small that close to end date.
 

kitkat275

New Member
Messages
1
Hi,
I took out a mortgage with PTSB in Dec 2014, I changed to a fixed rate 3.7% in November 2018 to reduce my monthly payments.
I have since decided to sell. My outstanding balance is €135,488.26
Original term 420 months, 369 remaining. Only 5 months into the 5 year fixed period.
I requested a redemption statement 10 days ago, haven't received it yet. Any idea what sort of breakage fee I could be looking at?
Thanks!
 

daveyboy31

Registered User
Messages
14
Folks, probably crystal ball stuff here but anybody have any views on whether the rates used to calculate breakage fees are likely to rise anytime soon? Have a lump sum of €35000 to pay off on a 10 year rate (3.3%) with BOI. Mortgage taken out last July. Was holding out hoping that if there was clarity around Brexit, that may help with the rates but that can has been kicked down the road. Trying to decide whether to cough up. The fee today is €1300
 

_ripped_off

Registered User
Messages
48
Hi Red, thanks for getting back to me. I’m in work for the day and haven’t got the letter with me with the breakdown details. I will post the exact wording and breakdown calc provided tonight.
 

relax carry on

Registered User
Messages
23
Any observations on this from Ulster Bank.

Called them in March to say I wanted to switch from the 7 year fixed rate of 3.99% taken up in December 2016 to their 5 year fixed rate of 2.90%. Got a breakage letter nearly 10 days later saying the fee was nearly 1500 and lasted until pretty much 2 days after I received the letter. I called to get the application form like it says and then another two letters breakage letters arrived, one for 1650 and another for 1900 over the next two weeks.
I sent back to form at the start of April like they said to do indicating I was fine with a paying a breakage fee. I assumed they would take it out of my bank account like the mortgage payments as there's nothing indicating how to pay the fee but nothing happened.

Called today to see what the delay was and was told I was supposed to pay it as soon I received the breakage letter then get the form sent. So apparently I've wasted 2 months and now have to wait for another breakage fee letter which going on the previous three will go up again.

I'm totally confused by this process especially the fee increasing.

Total left on mortgage €148,315 and term left 28 years 8 months.
 

RedOnion

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3,288
I'm totally confused by this proces
The Ulster Bank letters do seem confusing. There have been a few questions on them.

especially the fee increasing
Interbank interest rates have dropped a bit over the first few months this year. Fears if a recession in Europe have tightened rates even further, so the knick on impact is an increased break fee.

Can I ask why you want to break? Is it to switch rate / lender or to make a repayment?
 

relax carry on

Registered User
Messages
23
The Ulster Bank letters do seem confusing. There have been a few questions on them.


Interbank interest rates have dropped a bit over the first few months this year. Fears if a recession in Europe have tightened rates even further, so the knick on impact is an increased break fee.

Can I ask why you want to break? Is it to switch rate / lender or to make a repayment?
Thanks. It's to switch to a lower rate and use the savings to overpay up to the 10% allowed.
 

NoRegretsCoyote

Frequent Poster
Messages
918
So AIB wrote to me with a “breakdown” of how they are calculating the break fee. It is the formula on their website which they claim they use because of their hedging obligations. But they have not confirmed at what rate they hedged at do they have to disclose this?
I can’t imagine they hedged at the same rate as they are charging.
I have dealt with BoI extensively and they give you the two key parameters: the rate they hedged at when the rate was agreed, and the inter-bank deposit rate today they would face if you repaid them early.

Without this I am not sure how they can give you a worked example, am not sure if this is what you mean when you say 'breakdown'.

Anyway, I am not sure what is legally sufficient. Article 25(4) of the Mortgage Credit Directive says:

Where a consumer seeks to discharge his obligations under a credit agreement prior to the expiry of the agreement, the creditor shall provide the consumer without delay after receipt of the request, on paper or on another durable medium, with the information necessary to consider that option. That information shall at least quantify the implications for the consumer of discharging his obligations prior to the expiry of the credit agreement and clearly set out any assumptions used. Any assumptions used shall be reasonable and justifiable.
 
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