AIB No fixed rate break fee - 5 days to decide

G

gcarey75

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We are currently on a three year fixed mortgage and part of group that got writedown, we want to keep the same repayments. The bank are giving us an option of a new fixed rate which is lower at 2.55 percent. We have five days to avoid breakage fees unless we agree. If we select a new fixed term will this rule us out of getting a possible tracker if we sign it, what do you think Brendan
 
I wouldn’t think so, but there is no guarantee of getting a tracker unless someone takes a high court case and wins AND the bank decide to apply to all customers in the cohort.
 
Thanks, interesting how they are only giving us five days to decide and letting us change our fixed rate, will ask for tracker back anyway.
 
When you say ask for the tracker back, did you ever have a tracker? In any event they will not give you a tracker, they are only implementing the ombudsman’s decision, a 12% write down on the date you came off the fixed rate and the interest paid On that amount since then
 
No we never had a tracker but that's cos they didn't offer it anyway will see thanks again
 
Can I ask for a bit more info? What is your current fixed rate? I’m on a fixed and sent off a query last week to see if I could break. Still waiting to hear. With the new fixed rate are they letting you pay more each month or how would it work?

When I rang last week a firm policy didn’t seem to be established re people getting the reduction in capital who are fixed.
 
Hi g

I want to untangle the different issues

1) You have a fixed rate mortgage.
When did you take it out?
What is the rate?
What was the original term?

I suspect that what they are telling you has nothing to do with the Prevailing Rate.
They are telling you that currently there is no fixed rate breakage fee on this mortgage. And they are holding that open for 5 days.

It is probably right for you to break out of that fixed rate as there is no fee.
Just go to variable rate and then you can decide what to do next at your leisure.

2) After the write down you will owe less money.
If you pay the interest refund against this, you will owe less money again.

If you want, you can now shorten the term on your mortgage.

This will give you a new lower repayment.

3) Do you want to fix again?
What is your Loan to Value?

4818


I would probably not fix at 2.55% if I were paying the <50% rate of 2.75%.
But if I had an LTV of >80% and I were paying 3.15%, I would probably fix.

But there is no clear answer to this question.

You want to fix for 3 years at 2.55%. Feel free to do so.

4) What if AIB is directed by the High Court or Central Bank to give people trackers at 1.5%?

The fact that you fixed will not have any bearing on the issue.

Clearly if you were on a tracker rate of 1.5% , you would not have fixed at 2.55%. So AIB will refund the difference between what you paid at 2.55% and what you should have paid at 1.5%.

Brendan
 
If AIB is giving you the fee-free break because you are in the Prevailing Rate cohort, they would have to offer it to everyone in the cohort who is on a fixed rate.

I would imagine that this would be in the letter you get in the next few weeks.

And I doubt that they would give people only 5 days to make that decision.

So, I would be fairly sure, that the fee-free break is because of the terms of your fixed rate and not because you are in the cohort.



Calling AIB customers who fixed before the latest fixed rate cuts

Moderator's note: Due to a quirk in the way AIB calculates fixed rate break fees, there is a very good chance that if you fixed for 5 years within the last year at a rate of 2.85% , there will be zero break fee, as reported later in this thread I requested a break fee from AIB last Monday...
www.askaboutmoney.com

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

Many lenders have reduced their fixed rates Many people regret fixing at higher rates a few years ago. Many people think that because they have some time to go in their fixed rate, they cannot switch to another lender and get a lower rate or 2% cash back. However, since 2016, lenders can no...
www.askaboutmoney.com
 
My current fixed rate is 2.85 and they are offering 2.55 but I must accept within five working days, we started the three year fixed a year ago, we got reduction in mortgage and I rang to see could we keep our repayments the same .I asked to get it in writing that I wouldn't have to pay breakage fee. I was talking to someone in Aib and I asked if I agree to this will it affect me if a tracker is offered and she said the decision was made by FSPO and that no tracker will be given .I think I will go with 2.55 rate as it is better than current variable rate thanks again Brendan for everything
 
I would imagine that the no break fee is more a result of the timing when you fixed originally as opposed to them allowing to break as a result of the tracker/FSPO decision.
 
That's a standard letter, we received similar from ulster bank when breaking our fixed rate. If you wait longer they have to recalculate the breakage fee. As previous posters said it is nothing to do with prevailing rate.
 
We asked re breakage on 5 year fixed ( only taken a year ago) and got letter today from AIB with no breakage fee . Not related to write down .
 
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