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

barneyrubble

New Member
Messages
7
I got the breakage amount. €5510. Just wondering if anyone can figure out the formula that ulster bank use. Just want to see if they are just using the 6 month cap.
Any advice greatly appreciated.
Thanks in advance
Ongar, Just wondering what product you're looking at moving too.

We fixed in sept 2017 @ 3.99 and got breakage fee of 4k approx (waiting on the letter to come). Looking at our options now
 

ongar11

New Member
Messages
5
Ongar, Just wondering what product you're looking at moving too.

We fixed in sept 2017 @ 3.99 and got breakage fee of 4k approx (waiting on the letter to come). Looking at our options now
Barneyrubble, I'm looking at fixing for 2.6 over 5 yrs. LTV 79%. Letter very slow to come but rang UB and they gave me the figure over the phone. Letter arrived, was dated 23rd of Sep but only received it on the 30th stating the figure only lasts for 7 days. So i have requested another. They didn't state which method they used so also requested a calculation breakdown.
 

barneyrubble

New Member
Messages
7
Thanks Ongar. Our letter doesn't state calculation either


Lender: UB
Amount of mortgage balance outstanding: €193k
Date you fixed: Sept 2017
Period for which you fixed: 7 years
Fixed rate: 3.99
Term left: 5yrs
Breakage fee quoted: €3830

Got letter yesterday. Break fee of €3830 which is 6 months interest cap I gather?

Our options to change are 2.45% until dec 2021 or 2.75% to Dec 2023 or 2024.

Unsure what to do. We will be looking for a loan in the new year to do a small extension but this won't be mortgage top up. Repayments will be down by 131 or 161 by my calculations which would go towards loan repayment but then so would the 3830 breakage fee!!
Offer valid until 11th Oct
 

RedOnion

Frequent Poster
Messages
3,288
Anyone any advice for me?
Whichever you go with, the interest savings for next 5 years will cover your break fee several times over.

Personally, I think in 2 years time, the same rates will be available. Wholesale rate curves are flat, and competition will stop banks increasing margins. But it's crystal ball stuff. If you need certainty, go with the longer fixed rate.

I'd also suggest you get a top-up for the extension, but overpay mortgage as if it was a short term loan. Otherwise you're paying over 6% for it.
 

Fire away

Frequent Poster
Messages
53
Anybody put a ballpark guess to what my break fee would be?
Bank of Ireland 5 year fix taken out Sept 2018 so 4 years remaining. Fixed at 2.8% balance of 250k.
 

RedOnion

Frequent Poster
Messages
3,288
Anybody put a ballpark guess to what my break fee would be?
Bank of Ireland 5 year fix taken out Sept 2018 so 4 years remaining. Fixed at 2.8% balance of 250k.
About 7,500
I'm pretty sure BOI can tell you immediately when you call them to ask.
 

RedOnion

Frequent Poster
Messages
3,288
Thanks. Any idea why so high taught most break fees nearly zero now
Break fee is a factor of the movement in interbank rates and the remaining time of your fixed rate.

Interbank rates have pushed even further into negative territory since you fixed. There was a period when they were fairly stable between late 2016 & early 2019. So lots of people had near zero break fees.

When I started looking at this topic 2 years ago, short term rates were negative, and 5 year rates were about 0.3%. That was as low as they'd ever been, and after a long period of quantitative easing. It looked like we were at the very bottom of an interest rate cycle but it was uncertain how long the bottom would last.

There's been a lot of European and global factors since the start of 2019 that have pushed those rates even lower. 10 year Irish government debt dipped below 0% in August. This seemed impossible earlier in the year.
 

Okokokoknic

Registered User
Messages
7
Bit of an odd one here but I'll try and explain it.

Took out mortgage July 2018, fixed with BOI at 3.0% for one year.
Had intended on switching to UB in July 2019, but got held up with deeds issue - first registration of the title with Property Registration Authority.
(This was complicated further by a change of solicitor on our part handling the switch, who had to contact our old solicitor, who had to contact the original vendors solicitor etc).
As a result we sat on BOI variable from July 2019 to now, getting hit with 4.2%
I was just about to refix with BOI for 1 year when low and behold there finally seems to be movement with the deeds. I fear the switching process may take some time still to complete.
So my question is, if I refix with BOI today for 1 year at 2.9% (300K), and decide to break within 1 or 2 months, is there any way of guessing ahead of time what the max breakage fee could be? Or what would the breakage fee be if I decided to immediately break a few days after fixing? Or is purely crystal ball depending on the interbank rate at the time?
 

Jim_tpb

New Member
Messages
1
Lender:AIB
Rough value of property: 250,000
Amount of mortgage balance outstanding: 139,133
Date you fixed: 18/08/2010
Period for which you fixed: 10 yr
Fixed rate: 5.2%
Term left: 10 months
Breakage fee quoted: 2350.60

I should pay the breakage fee right? What's galling is that we asked for them to send the breakage fee calculations over 2 months ago and had to send a follow up before we got it
 

_ripped_off

Registered User
Messages
48
I’d definitely be complaining about the length of time to receive the breakage quote. Doesn’t surprise me with AIB though fiercely incompetent shower.
 

Alkers86

Registered User
Messages
69
My breakage free had been showing up around 8k for the last number of months but when I check today it's down below 2.5k. Might look at doing a switch
 
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