Posssible way of reducing Ulster Bank breakage costs?

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Coldwarrior

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I'm in the process of selling my house and moving, and unfortunately I'm locked into a fixed rate with Ulster Bank. The breakage fee I've been given is capped at 6 months interest (thankfully they have that cap or it'd be a lot more), just wondering if I can reduce this again by making a 10% over-payment on the mortgage prior to closing it?

With the deposit needed for the new house I don't have the cash available for the 10% over-payment, but once the house is sold and the solicitor receives the funds, would it work if they paid they 10% over-payment from this initially and then a few days later fully clear the mortgage from the remaining funds? I've a large-ish mortgage so I'd stand to save a few hundred euro.
 
Coldwarrior said:
With the deposit needed for the new house I don't have the cash available for the 10% over-payment, but once the house is sold and the solicitor receives the funds, would it work if they paid they 10% over-payment from this initially and then a few days later fully clear the mortgage from the remaining funds?
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No, there's no way the solicitor could manage this with the undertakings they provide to the bank.

What rate are you currently on with UB? I'll have a think about it for you.
 
RedOnion said:
No, there's no way the solicitor could manage this with the undertakings they provide to the bank.

What rate are you currently on with UB? I'll have a think about it for you.
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Thanks, I'm on the 2.5%, 2 years into a 5 year fixed term.
 
RedOnion said:
Who are you taking out the new mortgage with, and what rate?
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TBD, buying a new build in a development that's not complete yet, so there will be a gap of 8+ months between selling and buying. Plan to apply to Avant, KBC, Ulster and possibly AIB but will decide which to choose closer to the time.
 
I'm drawing a but if a blank with this I'm afraid.

Only thing that had popped into my head was getting the new mortgage with Ulster, and they would waive the break fee if you kept the rate you're on for that balance, but it might not be a runner with such a long gap between. You'd miss out saving about 0.3% interest, but that would be less than break fee.
 
Why couldn't the solicitor make the ten percent first and then request closing amount needed and pay it? The intent and outcome seems the same?

Regardless, will ub not calculate the break fee of 6 months on 90%, because you are permitted to overpay ten percent.
 
SPC100 said:
Why couldn't the solicitor make the ten percent first and then request closing amount needed and pay it? The intent and outcome seems the same?
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That's what I was thinking, though from what RedOnion says that might not be possible due to the undertakings the solicitor gives the bank (to pay off the mortgage with the proceeds of the sale I assume), I can see why that would be true. I haven't asked the solicitor about it but I may mention it to them and see what they say.

SPC100 said:
Regardless, will ub not calculate the break fee of 6 months on 90%, because you are permitted to overpay ten percent.
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I think the contract says 6 months interest, looking at the break figure it looks to be the full 6 months interest on 100%.
 
I don't know. Mortgage 111k. 10p.c. 11. Break on 100k say 1.25k.

Send payment of 112.25 along with instructions that payment is prepay 11 and covering break on 100.

Or solicitor sends two payments rather than one.

I'd ring UB and ask them
 
Just back to this again, looks like won't need to pay the full deposit on the next house for a while yet, so I could make the 10% overpayment on the current mortgage from savings now to reduce the breakage fee. I have full mortgage approval from UB and plan to apply to other banks over the summer to give us some options (and in case UB pull out before we drawdown), just wondering would this 10% overpayment (clearing out most of savings accounts) cause any issues or red flags when applying for mortgage approval with the other banks?
 
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