Key Post Mortgage switching in Ireland – break fee calculations and savings estimates

bcc-orr

New Member
Messages
3
  • Current lender - BOI
  • Outstanding mortgage balance (how much you still owe) - 602K
  • Approximate value of your property - 850K
  • The date you started your fixed-rate mortgage (month and year) July 2021
  • How many years you fixed for 5 years
  • Your current mortgage interest rate 2.5%
  • Your current monthly repayment (excluding any overpayments) 2430
  • Your property's BER (Building Energy Rating) – check it here or estimate it if necessary - C1
  • Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when? No
Looking to move to a 10/15 year fixed
 

contraflow

New Member
Messages
2
  • Current lender - AIB
  • Outstanding mortgage balance (how much you still owe) - 246K
  • Approximate value of your property - 520K
  • Your current mortgage interest rate 3.15% (variable rate - no break fee req)
  • Your current monthly repayment (excluding any overpayments) €1740
  • Your property's BER (Building Energy Rating) – check it here or estimate it if necessary - D1
  • Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when? No
Hi,
Was looking to fix for 5 yrs with AIB @ 2.35%, however I see Avant has a 5 year fixed rate of 1.95%. Therefore I am considering changing to them, but whatever interest saving I make, might be eaten up by solicitor/broker fees?

One complication of switching, we have a joint mortgage but one of us is not working at the moment. Would this put Avant off taking the mortgage on?
Thanks.
 

sobs17

Registered User
Messages
4
@sobs17 Your break fee should be zero at the moment – but confirm it with EBS. If it is higher than zero, please post it here when you receive it, including the date of the letter.
  • Switching immediately to EBS's 4-year green fixed rate (2.1% and you would get the 1% (€2,400) cashback) will save you about €2,800 over the next 4 years. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
    • I am assuming that you would get the €2,400 cashback in January 2026, but you should check this with EBS (and get it in writing if they say that you will get the cashback even if you switch to the green rate)

  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €2,020 over the next 4 years

  • Switching immediately to AIB's 5-year green fixed rate (2.15% with €2,000 cashback) will save you about €660 over the next 4 years
    • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)

  • Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will leave you worse off by about €2,280 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Avant Money's 10-year fixed rate (2.4% with no cashback) will leave you worse off by about €3,660 over the next 4 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to Avant Money's "One Mortgage" (a 2.5% fixed rate with no cashback) will leave you worse off by about €4,560 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 29 years)

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.9% with no cashback) will leave you worse off by about €8,220 over the next 4 years – but with the longer security of 10 or 15 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

  • Switching immediately to Finance Ireland's 20-year fixed rate (3.0% with no cashback) will leave you worse off by about €9,140 over the next 4 years – but with the longer security of 20 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

  • Switching immediately to Finance Ireland's 25-year fixed rate (3.15% with no cashback) will leave you worse off by about €10,520 over the next 4 years – but with the longer security of 25 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

These savings estimates use for comparison the scenario of switching to the 2.1% rate with EBS when the current fixed rate ends. And that's assuming that EBS are even offering a 2.1% rate in January 2024 – it could be higher (or lower). I am assuming that you would get the €2,400 cashback in January 2026 if you switch to EBS's green rate, but you should check this with them. The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

All of Avant's rates, and Finance Ireland's 10-year and longer fixed rates, allow you to avoid any potential break fee if you move home in the future (as long as you take out a new mortgage with them, and subject to certain conditions). And in the case of Finance Ireland you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move (again, subject to certain conditions).

The estimates also assume that you get your loan-to-value ratio (LTV) below 60% so that you are eligible for some of the listed rates. (You are already eligible for EBS's 2.1% green 4-year fixed rate and for all of Haven's rates.) Your LTV is currently 235.0k/370.0k = 63.5%. A higher property valuation (€392k) and/or a few more monthly mortgage payments and/or a lump sum overpayment will get you below 60%. E.g., a valuation of €380k and a €7k lump sum overpayment would bring your LTV down to 60%.

Bear in mind that interest rates could rise between now and the time that you complete any switch, so if you are thinking of switching you should probably apply simultaneously to two or more lenders for approval in principle (AIP).


It seems to be taking about three months to switch lenders at the moment. In your particular case it is unlikely that your break fee will rise above zero for the foreseeable future.
Thanks very much for the response Paul, very insightful! What are thee estimate legal fees and valuation fees involved?
From the EBS website appears the 1% would not be possible to move to the green mortgage:
The terms and conditions of the up to 3% Back in Cash Offer have been updated and;
  • As of the 24 February 2022, the offer is not available on the new EBS Green 4 Year Fixed Rate
 

Joe Smith

Registered User
Messages
4
Hi folks,
I was wondering what people think the medium term outlook is for mortgage interest rates.

We are currently:
* Balance 245k
* Value 700k
* Rate 2.1 fixed with AIB with 3.5 years left on fixed tem
* Overall 20 years left
* Public sector combined income 145k approx

When we fixed last Autumn, 4 years seemed sensible enough, but with the storm coming I'm not sure anymore.

Our house is over 100 years old, typical Dublin redbrick. So while Avant looks appealing, I've read that we may not be in their target segment.

Any advice on whether we should hold where we are for now, or switch is appreciated
 

fixedratenovice

New Member
Messages
3
  • Current lender - BOI
  • Outstanding mortgage balance (how much you still owe) - €310k
  • Approximate value of your property - €400k
  • The date you started your fixed-rate mortgage (month and year) - July 2019
  • How many years you fixed for - 3 years
  • Your current mortgage interest rate - 3%
  • Your current monthly repayment (excluding any overpayments) - €1,254
  • Your property's BER (Building Energy Rating) – check it here or estimate it if necessary - D1
  • Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when? 1% after 5 years, i.e. €3k in July 2024

Hi folks, my 3 year fixed period @ 3% with BOI is coming to an end next month and I'm looking at fixing with BOI for either 5 years @ 2.8% or 10 years @ 3.1% - these rates are rates BOI has recently offered me by post. I am not considering moving my mortgage because I have just moved jobs and am in a probationary period.

My main question relates to potential break costs. I see myself staying in my current property for at least 5 years, with a maybe 30% chance I'd move after that (i.e. between 5 and 10 years from now) and therefore need to break.

BOI's break fee appears to be based on the outstanding mortgage balance when you break (plus notional interest that one would have paid for the rest of the period?) x by the difference between the rate BOI borrowed to fund the fixed mortgage and the rate BOI could get on deposit at the time of breaking x by the number of days left of the mortgage (and then all of this divided by 365).

So I'm wondering (1) what rate would BOI be roughly borrowing at now to fund the mortgage if I fix, (2) what affects BOI's deposit rate, and (3) whether BOI would let me move my remaining fixed rate to a new property if I sold my current place in 5+ years' time and bought a new property? I think I could live with a break of €10k or less 5-10 years from now. But I'd like to understand how it all works a bit better.

Thanks!
 
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test123

Registered User
Messages
59
Anyone else experiencing delays in getting the break fee letter from Ulster Bank, requested it over 2 weeks ago, I followed up with a phone call last week, but told there was delays but expect it in a few days. Last time I requested one a few months ago, I got in within days. Fear they are deliberately stalling so that we can't fix before rates increase.
 

barneyrubble

Registered User
Messages
12
I received the break fee letter but still haven't received the rate change so feel your pain. I requested both on the 8th June and break fee arrived on the 16th to be actioned by this Friday.

As Paul mentioned above, will keep at them. My break fee is most likely going to be zero and I only plan to re-fix with them so once I get that letter will plough ahead with that and pay the zero break fee.

Frustrating all the same for what should be relatively straight forward

Ya we've been on to them again! Was supposed to be in todays post but wasn't. They very reluctantly sent it to OH email as he is staff so it's confirmed as zero

@Paul F we're just going to refix with UB. Looking at the 5 yr fixed at 2.45%. And giving up our tracker as well (its 2.5% so not worth much anymore). They do need to do a drive by valuation as they have our LTV higher then it should be at moment so that might add small delay
 

Paul F

Registered User
Messages
732
Anyone else experiencing delays in getting the break fee letter from Ulster Bank, requested it over 2 weeks ago, I followed up with a phone call last week, but told there was delays but expect it in a few days. Last time I requested one a few months ago, I got in within days. Fear they are deliberately stalling so that we can't fix before rates increase.
There is a good thread here that explains the best way to contact Ulster Bank when you want a break fee quote and rate options form.
 

Paul F

Registered User
Messages
732
Thanks very much for the response Paul, very insightful! What are thee estimate legal fees and valuation fees involved?
I assumed legal fees of €1,300 (including VAT and outlays) and a valuation fee of €150 or €185 (depending on the lender). Neither of these fees apply if you are simply switching to another EBS rate, and the savings estimates already factor that in.

From the EBS website appears the 1% would not be possible to move to the green mortgage:
The terms and conditions of the up to 3% Back in Cash Offer have been updated and;
  • As of the 24 February 2022, the offer is not available on the new EBS Green 4 Year Fixed Rate
What I was getting at here is the following: when you took out your mortgage with EBS (in January 2021), the terms and conditions of the 3% Back in Cash Mortgage Offer were different. Those are the Ts&Cs that apply to you, not the updated ones.

The green rate did not exist back then, and there is arguably nothing in the old Ts&Cs that would allow EBS to deny you the 1% extra cashback in January 2026, even if you now switch to the EBS green rate. The only clause that they could try to use is this one:
We reserve the right to amend, withdraw or terminate the offer or substitute the offer with another or alter the specification of the offer without prior notice. Should the offer be amended, terminated or withdrawn, we will endeavour to inform all affected customers and will provide a similar alternative offer that meets with our regulatory obligations.
but it is not at all clear to me that they could change the terms of the offer for people (e.g., you) who have already signed up to it.

I'd like to hear other people's thoughts on this. @Brendan Burgess @peemac @MrEarl

@sobs17 If you are thinking of switching to another lender, don't let this debate hold you up – start the switching process immediately. By the way, it is possible for you to switch to EBS's green rate – the argument is around whether or not you would have to give up the future 1% cashback to do so. Even if they deny you the 1% cashback, it would be well worth your while to switch to the green rate. (It would be even more worth your while to switch to Haven or AIB, but that takes time, and interest rates could rise in the meantime.)
 
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Paul F

Registered User
Messages
732
Current lender: Ulster Bank
Outstanding mortgage balance: 246k
Approximate value of your property: 395k
The date you started your fixed-rate mortgage: September 2020
How many years you fixed for: 2
Your current mortgage interest rate: 2.3%
Your current monthly repayment: 1381 eur
Your property's BER: B1
Are you due to get extra cashback from your current lender in the future: No
@___berta___
  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €2,880 over the next 4 years

  • Switching immediately to AIB's 5-year green fixed rate (2.15% with €2,000 cashback) will save you about €1,520 over the next 4 years
    • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)

  • Switching immediately to Avant Money's 4-year fixed rate (1.95% with no cashback) will save you about €1,300 over the next 4 years

  • Switching immediately to Ulster Bank's 4-year green fixed rate (2.25% with no cashback) will save you about €60 over the next 4 years. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
    • Note that if you decide to do this, your mortgage will soon move onto Permanent TSB's books, and they discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • For example, if you were an existing Permanent TSB customer, the best rate you would be able to switch to today is 2.8%
    • So if you switch to this Ulster Bank offer now, you will probably not be eligible to switch to one of Permanent TSB's low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).

  • Switching immediately to Avant Money's 5-year fixed rate (2.15% with no cashback) will leave you worse off by about €520 over the next 4 years

  • Switching immediately to Ulster Bank's 5-year fixed rate (2.35% with no cashback) will leave you worse off by about €860 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
    • The same warnings as above regarding higher Permanent TSB rates in the future apply

  • Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will leave you worse off by about €1,420 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Avant Money's 10-year fixed rate (2.4% with no cashback) will leave you worse off by about €2,800 over the next 4 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to Haven's 7-year fixed rate (2.65% with €2,000 cashback) will leave you worse off by about €3,040 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Avant Money's "One Mortgage" (a 2.5% fixed rate with no cashback) will leave you worse off by about €3,720 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 18 years)

  • Switching immediately to Ulster Bank's 7- or 10-year fixed rate (2.8% with no cashback) will leave you worse off by about €4,980 over the next 4 years – but with the longer security of 7 or 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
    • The same warnings as above regarding higher Permanent TSB rates in the future apply

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.9% with no cashback) will leave you worse off by about €7,380 over the next 4 years – but with the longer security of 10 or 15 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

These savings estimates use for comparison the scenario of switching to the 2.25% rate with Ulster Bank when the current fixed rate ends. And that's assuming that Ulster Bank (or Permanent TSB, if they have taken over your mortgage by then) are even offering a 2.25% rate in January 2023 – it could be higher (or lower). The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

It may seem like it is not worth switching to another lender but bear in mind that your mortgage will soon be owned by Permanent TSB, whose rates are much higher than Ulster Bank's. So if you don't switch now, you might find that you really want to switch in a few years' time, at which point rates might be higher (and it might be impossible to switch if your financial situation has deteriorated).

All of Avant's rates, and Finance Ireland's 10-year and longer fixed rates, allow you to avoid any potential break fee if you move home – within Ireland – in the future (as long as you take out a new mortgage with them, and subject to certain conditions). And in the case of Finance Ireland you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move within Ireland (again, subject to certain conditions).

The estimates also assume that you get your loan-to-value ratio (LTV) below 60% so that you are eligible for the listed rates. Your LTV is currently 246.0k/395k = 62.3%. A slightly higher property valuation (€410k) and/or a few more monthly mortgage payments and/or a lump sum overpayment will get you below 60%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.

Bear in mind that interest rates could rise between now and the time that you complete any switch, so if you are thinking of switching you should probably apply simultaneously to two or more lenders for approval in principle (AIP).

Some considerations:
- we would like to move from Ireland within the next 5 years
- not sure if we will sell or keep the house and rent it out
- we are both in higher income bracket and are good savers, so we would consider overpaying mortgage by 10% annually
If you expect to sell up in the next few years and leave Ireland, either avoid a long fixed rate or pick a mortgage that puts a cap on any break fee. (Avant's "One Mortgage", where you fix for the full term of the mortgage, offers this feature. It is not clear if their shorter-term fixed rates do.)

I am not sure if you are allowed to keep the same mortgage interest rate if you start renting out the house, or whether you will have to move to a Buy-to-Let rate. Maybe search for the topic on this site or start a new thread and ask the question.

I wouldn't bet on Permanent TSB continuing to allow the 10% overpayment facility when they buy your mortgage from Ulster Bank. There are differing views on this site about whether Permanent TSB will maintain such features or not, so bear that in mind if you are planning to stay with Ulster Bank. (Note that it is possible for the penalty for making overpayments to be low or even zero – it depends on interbank interest rates and how they change.)
 

Paul F

Registered User
Messages
732
  • Current lender: EBS
  • Outstanding mortgage balance (how much you still owe): €275,000
  • Approximate value of your property: €500,000
  • The date you started your fixed-rate mortgage (month and year): Feb 2022
  • How many years you fixed for: 1
  • Your current mortgage interest rate: 2.9%
  • Your current monthly repayment (excluding any overpayments): €1,385
  • Your property's BER (Building Energy Rating) – check it here or estimate it if necessary: B2 (est)
  • Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when?: No
@wab0607 Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with EBS. If it is higher than zero, please post it here when you receive it, including the date of the letter.

The below savings estimates assume that you switch your full outstanding balance to the new lender, i.e., you don't reduce the balance before switching.
  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €3,040 over the next 4 years

  • Switching immediately to Avant Money's 4-year fixed rate (1.95% with no cashback) will save you about €1,520 over the next 4 years

  • Switching immediately to AIB's 5-year green fixed rate (2.15% with €2,000 cashback) will save you about €1,480 over the next 4 years
    • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)

  • Switching immediately to EBS's 4-year green fixed rate (2.1% with no cashback) will save you about €1,300 over the next 4 years. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to Haven's 7-year fixed rate (2.65% with €5,000 cashback) will leave you worse off by about €740 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will leave you worse off by about €1,600 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • This is better value than the Haven 7-year fixed rate over the next seven years

  • Switching immediately to Haven's 10-year fixed rate (2.85% with €5,000 cashback) will leave you worse off by about €2,840 over the next 4 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to Avant Money's 10-year fixed rate (2.4% with no cashback) will leave you worse off by about €3,160 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • This is much better value than the Haven 10-year fixed rate over the next ten years

  • Switching immediately to Avant Money's "One Mortgage" (a 2.5% fixed rate with no cashback) will leave you worse off by about €4,200 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 23 years)

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.9% with no cashback) will leave you worse off by about €8,400 over the next 4 years – but with the longer security of 10 or 15 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

These savings estimates use for comparison the scenario of switching to the 2.1% rate with EBS when the current fixed rate ends. And that's assuming that EBS are even offering a 2.1% rate in February 2023 – it could be higher (or lower). The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

All of Avant's rates, and Finance Ireland's 10-year and longer fixed rates, allow you to avoid any potential break fee if you move home in the future (as long as you take out a new mortgage with them, and subject to certain conditions). And in the case of Finance Ireland you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move (again, subject to certain conditions).

If you're feeling brave, you could consider the strategy outlined in this thread: switch to Haven's 2.35% 3-year fixed rate and get the €5k cashback. Then quickly switch to Haven's 2.0% green rate. If it works, you will be better off by about €6,040 in four years' time. Nobody knows for sure if Haven will allow you to do this, so you might be stuck on the 2.35% rate, but at least you'd have got the €5k cashback.

If you want savings estimates for longer-term Finance Ireland fixed rates, let me know.

Bear in mind that interest rates could rise between now and the time that you complete any switch, so if you are thinking of switching you should probably apply simultaneously to two or more lenders for approval in principle (AIP).

The above details are in relation to our PPR. We started the mortgage in 2009 for €355,000 when our build commenced and final draw down was in 2010 on completion of build. Mortgage taken out was for 34 yrs as we were still living in our first home with the intention of selling same, reducing capital and years on new build to something close to 25 yr mortgage with money from sale. Circumstances dictated that it was wiser to hold onto first home and rent out as the market was so poor in 2010.

Roll on to 2022 and we are in the process of selling this first property now. Small mortgage still on this and once sold, and all going well, we anticipate having approx €220,000 left over once mortgage is clear and all fees and CGT is paid. No breakage fee there as it's on a variable rate.

Question is, we are in a fixed on PPR until Feb 2023. If we reduce the o/s capital on PPR, when fixed ends, with proceeds from sale of first home to below €100K are we then not an attractive customer for a switch? Should we switch first and then reduce capital? Quite peeved with current lender as we applied for interest only on the rental while it is on the market, to reduce strain on finances of covering both mortgages for that period, but were refused.
There is no guarantee that any of the above lenders will let you switch to them while you own two properties, so you may have no choice but to sell the rental before switching. (This does not apply to the case of changing to a different rate with EBS, which is easy.) Note that Avant have a reputation for being quite strict when it comes to mortgage affordability. The only way to know is to apply for Approval in Principle (with multiple lenders) and see what they say.

As for whether to switch first and then reduce the capital or vice versa, you get more cashback with some of the above offers by having a larger mortgage balance. But if you decide to reduce the balance after you have switched you need to hope that the break fee is low or zero. That will be the case if interbank interest rates have risen between the time you switch and the time you reduce the balance, but rate movements are difficult to predict.

In the case of AIB's green mortgage, it is likely that you will be able to reduce the balance without penalty for the foreseeable future (see this thread). You may want to get your loan-to-value (LTV) ratio below 50% if you decide to switch to AIB so that you can a slightly lower (2.1%) rate.

Also wondering when we do reduce o/s balance on PPR should we continue similar monthly payments to clear mortgage in approx 5 yrs, going on my figures, and fix for that length of time? Or reduce monthly payments and spread over 10 yrs, fixing for 4/5 yrs and hope for the best for the remaining 5 yrs. Have always been quite averse to fixing for a long period but looking at how things are going it may be time to get over that hesitation.
If you do decide to reduce the balance but keep the monthly repayments the same as before, make sure that you keep your contractual mortgage term unchanged. This will give you breathing space if you get into financial difficulty later (see this thread).

This thread shows the rules of the various lenders regarding penalty-free overpayments.

As for whether or not to reduce the balance at all, remember that reducing the balance may not be the best use of your money. Your priorities should usually be:
  • Paying off expensive debt (credit cards, personal loans, car loans, etc.)
  • Building up an emergency fund in a savings/current account (3 to 6 months' living expenses)
  • Saving money for any expenses you will have over the next few years (kids; childcare; adult children going to college, etc.)
  • Maxing out your pension contributions (very large tax relief is given)
  • Overpaying your mortgage/reducing the balance
in approximately that order.
 
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Paul F

Registered User
Messages
732
Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when? No
@bcc-orr Are you sure that you are not due an extra 1% cashback in four years' time?
 

Paul F

Registered User
Messages
732
  • Current lender UB
  • Outstanding mortgage balance (how much you still owe) 160k
  • Approximate value of your property 435k
  • The date you started your fixed-rate mortgage (month and year) Oct 2018
  • How many years you fixed for: 4 years, end 30 Sep 2022
  • Your current mortgage interest rate 2.6%
  • Your current monthly repayment (excluding any overpayments) €1269
  • Your property's BER (Building Energy Rating) – C1 (BER is 10 years old, might possibly be a B3 now - have replaced open fire with stove and put thermostatic valves on all the rads)
  • Are you due to get extra cashback from your current lender: No
@Indecisive.com Your break fee should be around €180 at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Ulster Bank (and please post it here when you receive it, including the date of the letter).
  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €2,200 over the next 4 years
    • You must get a BER cert with a rating of B3 or better to be eligible for this rate. If you get a BER assessment and the rating comes in lower than B3, you will have wasted the money.

  • Switching immediately to AIB's 5-year green fixed rate (2.1% with €2,000 cashback) will save you about €1,640 over the next 4 years
    • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)
    • You must get a BER cert with a rating of B3 or better to be eligible for this rate

  • Switching immediately to Avant Money's 4-year fixed rate (1.95% with no cashback) will save you about €640 over the next 4 years

  • Switching immediately to AIB's 5-year fixed rate (2.35% with €2,000 cashback) will save you about €460 over the next 4 years

  • Switching immediately to Ulster Bank's 4- or 5-year fixed rate (2.35% with no cashback) will leave you worse off by about €100 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
    • Note that if you decide to do this, your mortgage will soon move onto Permanent TSB's books, and they discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • For example, if you were an existing Permanent TSB customer, the best rate you would be able to switch to today is 3.0%
    • So if you switch to this Ulster Bank offer now, you will probably not be eligible to switch to one of Permanent TSB's low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).

  • Switching immediately to Avant Money's 5-year fixed rate (2.15% with no cashback) will leave you worse off by about €460 over the next 4 years

  • Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will leave you worse off by about €1,020 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to AIB's 4-year fixed rate (2.65% with €2,000 cashback) will leave you worse off by about €1,220 over the next 4 years

  • Switching immediately to Avant Money's 10-year fixed rate (2.4% with no cashback) will leave you worse off by about €1,860 over the next 4 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to Avant Money's "One Mortgage" (a 2.4% fixed rate with no cashback) will leave you worse off by about €1,860 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 12 years)

  • Switching immediately to Ulster Bank's 7- or 10-year fixed rate (2.8% with no cashback) will leave you worse off by about €2,620 over the next 4 years – but with the longer security of 7 or 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
    • The same warnings as above regarding higher Permanent TSB rates in the future apply

  • Switching immediately to Finance Ireland's 10-year fixed rate (2.9% with no cashback) will leave you worse off by about €4,660 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

These savings estimates use for comparison the scenario of switching to the 2.35% rate with Ulster Bank when the current fixed rate ends. And that's assuming that Ulster Bank (or Permanent TSB, if they have taken over your mortgage by then) are even offering a 2.35% rate in October 2022 – it could be higher (or lower). The estimates also account for any fees (break fee, solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

It may seem like it is not worth switching to another lender but bear in mind that your mortgage will soon be owned by Permanent TSB, whose rates are much higher than Ulster Bank's. So if you don't switch now, you might find that you really want to switch in a few years' time, at which point rates might be higher (and it might be impossible to switch if your financial situation has deteriorated).

All of Avant's rates, and Finance Ireland's 10-year and longer fixed rates, allow you to avoid any potential break fee if you move home in the future (as long as you take out a new mortgage with them, and subject to certain conditions). And in the case of Finance Ireland you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move (again, subject to certain conditions).

Bear in mind that interest rates could rise between now and the time that you complete any switch, so if you are thinking of switching you should probably apply simultaneously to two or more lenders for approval in principle (AIP).

I have started the switching process to Avant (I am thinking 7 year fixed) but its painfully slow. Got AIP on 16May22 and I would consider myself a straightforward case (just me, no other loans, good job\income, good LTV). Am now wondering whether I should just extend fixed rate with UB (I didn't realize until I read it here yesterday, that I would be able to do this straight away without penalty, and not have to wait until September) or maybe try get the green rate mortgage with AIB and at least get the €2k cashback (if my BER is B3).
I don't know if you are aware of this but you must draw down with Avant by 15 July to get the 7-year fixed rate at 1.95%. Otherwise it will increase to 2.25%. (Avant's 4-year fixed rate is staying 1.95% for the moment.)

If you decide to abandon the switch to Avant, first check that you are not liable for fees to your solicitor or broker.

If you decide to re-fix with Ulster Bank, you will have to pay the break fee.
 

Paul F

Registered User
Messages
732
  • Current lender - BOI
  • Outstanding mortgage balance (how much you still owe) - 602K
  • Approximate value of your property - 850K
  • The date you started your fixed-rate mortgage (month and year) July 2021
  • How many years you fixed for 5 years
  • Your current mortgage interest rate 2.5%
  • Your current monthly repayment (excluding any overpayments) 2430
  • Your property's BER (Building Energy Rating) – check it here or estimate it if necessary - C1
  • Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when? No
@bcc-orr Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Bank of Ireland. If it is higher than zero, please post it here when you receive it, including the date of the letter.
  • Switching immediately to Permanent TSB's 5-year fixed rate (2.55% with €12,040 initial cashback and 2% monthly cashback) will save you about €11,480 over the next 4 years
    • Note that Permanent TSB discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • For example, if you were an existing Permanent TSB customer, the best rate you would be able to switch to today is 3.0%
    • So if you switch to them now, you will not be eligible to switch to one of their low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).

  • Switching immediately to Avant Money's 4-year fixed rate (2.05% with no cashback) will save you about €8,980 over the next 4 years

  • Switching immediately to AIB's 4-year fixed rate (2.2% with €2,000 cashback) will save you about €7,540 over the next 4 years

  • Switching immediately to Avant Money's 5-year fixed rate (2.25% with no cashback) will save you about €4,340 over the next 4 years

  • Switching immediately to Avant Money's 7-year fixed rate (2.35% with no cashback) will save you about €2,000 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Avant Money's 10-year fixed rate (2.5% with no cashback) will leave you worse off by about €1,500 over the next 4 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to Haven's 10-year fixed rate (2.85% with €5,000 cashback) will leave you worse off by about €4,640 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • This is much worse value than the Avant 10-year fixed rate over the next ten years

  • Switching immediately to Avant Money's "One Mortgage" (a 2.65% fixed rate with no cashback) will leave you worse off by about €5,000 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 29 years)

  • Switching immediately to Bank of Ireland's 5-year fixed rate (3.0% with no cashback) will leave you worse off by about €11,880 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (3.05% with no cashback) will leave you worse off by about €14,380 over the next 4 years – but with the longer security of 10 or 15 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below
    • And your interest rate (initially 3.05%) will automatically fall as time passes and you move into lower loan-to-value (LTV) brackets. See the section "How we decide rate reductions" on this page.

  • Switching immediately to Finance Ireland's 20-year fixed rate (3.15% with no cashback) will leave you worse off by about €16,740 over the next 4 years – but with the longer security of 20 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below
    • And your interest rate (initially 3.15%) will automatically fall as time passes and you move into lower loan-to-value (LTV) brackets. See the section "How we decide rate reductions" on this page.

  • Switching immediately to Bank of Ireland's 10-year fixed rate (3.3% with no cashback) will leave you worse off by about €18,920 over the next 4 years – but with the longer security of 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to Finance Ireland's 25-year fixed rate (3.3% with no cashback) will leave you worse off by about €20,260 over the next 4 years – but with the longer security of 25 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below
    • And your interest rate (initially 3.3%) will automatically fall as time passes and you move into lower loan-to-value (LTV) brackets. See the section "How we decide rate reductions" on this page.

These savings estimates use for comparison the scenario of doing nothing. The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

All of Avant's rates, and Finance Ireland's 10-year and longer fixed rates, allow you to avoid any potential break fee if you move home in the future (as long as you take out a new mortgage with them, and subject to certain conditions). And in the case of Finance Ireland you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move (again, subject to certain conditions).

The estimates also assume that you get your loan-to-value ratio (LTV) below 70% so that you are eligible for the listed rates. Your LTV is currently 602k/850k = 70.8%. A slightly higher property valuation (€860k) and/or a few more monthly mortgage payments and/or a small overpayment will get you below 70%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.

Bear in mind that interest rates could rise between now and the time that you complete any switch, so if you are thinking of switching you should probably apply simultaneously to two or more lenders for approval in principle (AIP).
 
Last edited:

Paul F

Registered User
Messages
732
  • Current lender - AIB
  • Outstanding mortgage balance (how much you still owe) - 246K
  • Approximate value of your property - 520K
  • Your current mortgage interest rate 3.15% (variable rate - no break fee req)
  • Your current monthly repayment (excluding any overpayments) €1740
  • Your property's BER (Building Energy Rating) – check it here or estimate it if necessary - D1
  • Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when? No
@contraflow Because you are on a variable-rate mortgage, you do not have to pay a break fee.
  • Switching immediately to Permanent TSB's 4-year fixed rate (2.05% with 2% monthly cashback) will save you about €9,580 over the next 4 years
    • Note that Permanent TSB discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • For example, if you were an existing Permanent TSB customer, the best rate you would be able to switch to today is 3.0%
    • So if you switch to them now, you will not be eligible to switch to one of their low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).

  • Switching immediately to Avant Money's 4-year fixed rate (1.95% with no cashback) will save you about €9,180 over the next 4 years

  • Switching immediately to Avant Money's 5-year fixed rate (2.15% with no cashback) will save you about €7,400 over the next 4 years

  • Switching immediately to AIB's 5-year fixed rate (2.35% with no cashback) will save you about €6,980 over the next 4 years. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will save you about €6,520 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Avant Money's 10-year fixed rate (2.4% with no cashback) will save you about €5,200 over the next 4 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to Avant Money's "One Mortgage" (a 2.4% fixed rate with no cashback) will save you about €5,200 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 15 years)

  • Switching immediately to Haven's 7-year fixed rate (2.65% with €2,000 cashback) will save you about €5,000 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to KBC's 10-year fixed rate (2.85% with €3,000 cashback) will save you about €4,220 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • Note that if you decide to do this, your mortgage will soon move onto Bank of Ireland's books, and they discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • For example, if you were an existing Bank of Ireland customer, the best rate you would be able to switch to today is 3.0%
    • So if you switch to this KBC offer now, you will probably not be eligible to switch to one of Bank of Ireland's low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).
    • You must apply by 15 July 2022 if you wish to switch to KBC. You would also have to apply for a current account with them by that date.

  • Switching immediately to AIB's 7-year fixed rate (2.95% with no cashback) will save you about €1,640 over the next 4 years – but with the longer security of 7 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to Finance Ireland's 10-year fixed rate (2.9% with no cashback) will save you about €740 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

  • Switching immediately to AIB's 10-year fixed rate (3.1% with no cashback) will save you about €280 over the next 4 years – but with the longer security of 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

These savings estimates use for comparison the scenario of staying on the variable rate with AIB and assume that that rate doesn't change between now and June 2026 (which is very unlikely). The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

All of Avant's rates, and Finance Ireland's 10-year and longer fixed rates, allow you to avoid any potential break fee if you move home in the future (as long as you take out a new mortgage with them, and subject to certain conditions). And in the case of Finance Ireland you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move (again, subject to certain conditions).

Bear in mind that interest rates could rise between now and the time that you complete any switch, so if you are thinking of switching you should probably apply simultaneously to two or more lenders for approval in principle (AIP).

One complication of switching, we have a joint mortgage but one of us is not working at the moment. Would this put Avant off taking the mortgage on?
A lender will only let you switch to them if they judge that you can comfortably afford the repayments in your current situation – one income only, in your case. Note that Avant have a reputation for being quite strict when it comes to mortgage affordability. The only way to know is to apply for Approval in Principle (with multiple lenders) and see what they say.

AIB offer better rates (and Haven offer bigger cashback) if you are borrowing more than €250k. No harm in asking them if you are eligible for those rates.
 

jim

Registered User
Messages
711
Hi Paul F

Its amazing what you have done here, thank you.

Current lender - EBS
  • Outstanding mortgage balance (how much you still owe) - 220K
  • Approximate value of your property - 520K
  • The date you started your fixed-rate mortgage (month and year) May 2022 (very recent!)
  • How many years you fixed for: 5 years
  • Your current mortgage interest rate 2.75%
  • Your current monthly repayment (excluding any overpayments) 898
  • Your property's BER (Building Energy Rating) – check it here or estimate it if necessary - b2
  • Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when? 1% after 5 years. Also am due 2% shortly as a result of may fix date.

I have a seperate approval in principal with ICS at a rate of 2.4%(i think, its around that) and am wondering it makes sense to switch given that id probably have a break fee with ebs.

Should i ask ebs what the break fee would be?

Thanks again!
 

bcc-orr

New Member
Messages
3
@bcc-orr Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Bank of Ireland. If it is higher than zero, please post it here when you receive it, including the date of the letter.
  • Switching immediately to Permanent TSB's 5-year fixed rate (2.55% with €12,040 initial cashback and 2% monthly cashback) will save you about €11,480 over the next 4 years
    • Note that Permanent TSB discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • For example, if you were an existing Permanent TSB customer, the best rate you would be able to switch to today is 3.0%
    • So if you switch to them now, you will not be eligible to switch to one of their low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).

  • Switching immediately to Avant Money's 4-year fixed rate (2.05% with no cashback) will save you about €8,980 over the next 4 years

  • Switching immediately to AIB's 4-year fixed rate (2.2% with €2,000 cashback) will save you about €7,540 over the next 4 years

  • Switching immediately to Avant Money's 5-year fixed rate (2.25% with no cashback) will save you about €4,340 over the next 4 years

  • Switching immediately to Avant Money's 7-year fixed rate (2.35% with no cashback) will save you about €2,000 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Avant Money's 10-year fixed rate (2.5% with no cashback) will leave you worse off by about €1,500 over the next 4 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to Haven's 10-year fixed rate (2.85% with €5,000 cashback) will leave you worse off by about €4,640 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • This is much worse value than the Avant 10-year fixed rate over the next ten years

  • Switching immediately to Avant Money's "One Mortgage" (a 2.65% fixed rate with no cashback) will leave you worse off by about €5,000 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 29 years)

  • Switching immediately to Bank of Ireland's 5-year fixed rate (3.0% with no cashback) will leave you worse off by about €11,880 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (3.05% with no cashback) will leave you worse off by about €14,380 over the next 4 years – but with the longer security of 10 or 15 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below
    • And your interest rate (initially 3.05%) will automatically fall as time passes and you move into lower loan-to-value (LTV) brackets. See the section "How we decide rate reductions" on this page.

  • Switching immediately to Finance Ireland's 20-year fixed rate (3.15% with no cashback) will leave you worse off by about €16,740 over the next 4 years – but with the longer security of 20 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below
    • And your interest rate (initially 3.15%) will automatically fall as time passes and you move into lower loan-to-value (LTV) brackets. See the section "How we decide rate reductions" on this page.

  • Switching immediately to Bank of Ireland's 10-year fixed rate (3.3% with no cashback) will leave you worse off by about €18,920 over the next 4 years – but with the longer security of 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to Finance Ireland's 25-year fixed rate (3.3% with no cashback) will leave you worse off by about €20,260 over the next 4 years – but with the longer security of 25 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below
    • And your interest rate (initially 3.3%) will automatically fall as time passes and you move into lower loan-to-value (LTV) brackets. See the section "How we decide rate reductions" on this page.

These savings estimates use for comparison the scenario of doing nothing. The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

All of Avant's rates, and Finance Ireland's 10-year and longer fixed rates, allow you to avoid any potential break fee if you move home in the future (as long as you take out a new mortgage with them, and subject to certain conditions). And in the case of Finance Ireland you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move (again, subject to certain conditions).

The estimates also assume that you get your loan-to-value ratio (LTV) below 70% so that you are eligible for the listed rates. Your LTV is currently 602k/850k = 70.8%. A slightly higher property valuation (€860k) and/or a few more monthly mortgage payments and/or a small overpayment will get you below 70%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.

Bear in mind that interest rates could rise between now and the time that you complete any switch, so if you are thinking of switching you should probably apply simultaneously to two or more lenders for approval in principle (AIP).
Paul thank you so much for this - I looked at the FYI and didn't notice an answer.
If I break my fixed rate - am I transfered to the variable rate if I did not switch.
Or do I ask to break but not actually break until about to drawdown from the new lender?

Many thanks
 
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