Refix Preemptively

That clearly relates to the breakage fee for your existing fixed rate. I don't see any other interpretation. For example, if you tried to break out next year and you were hit with a fee, you would have no cause for complaint.

The break fee could be substantial for a 7 year term if interest rates fall.

If that is a big factor in your decision, then ring ptsb and see what you can do now. There is probably no breakage fee today as you fixed recently.
 
ClubMan said:
Is there a (14 day?) cooling off period for mortgages?
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I don't think so. Otherwise you could fix before an ECB meeting and if they don't announce an increase, cancel it.

But if interest rates are unchanged since you fixed, there should be no break fee. So as she fixed this morning, she should be able to break out free this afternoon.

But on reflection, I misunderstood her post. I don't think Sarah thinks that there is no break fee on the new fixed rate.
 
My comment on no fees to break relate to my existing mortgage - I am coming out of a fix period in September and I have started the process early to fix into a new rate before the ECB meets on the 30th April.

However I am fairly certain I can break my other mortgage due to come out of fixed rate in 2029 with 0 penalty as well - they sent me a letter at the start of the process for that account with the wrong LTV value on it (higher) and the penalty was 0.00 as well.

I would assume based on this information if you break a fixed rate to go onto a higher rate there is no penalty.
 
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Sarah Ryan said:
I would assume based on this information if you break a fixed rate to go onto a higher rate there is no penalty.
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I suppose you wouldn't break out of a fixed rate with 6 years to go to fix again at a higher rate.

But you might want to break out after a year to make an overpayment. If rates have fallen in the meantime, you will pay a penalty.
 
Brendan Burgess said:
I suppose you wouldn't break out of a fixed rate with 6 years to go to fix again at a higher rate.
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Agreed but I have 2 mortgages on the property, the one I am refixing (this was a 5 year fixed rate coming to an end) and another 7 year fixed rate which is running until 2029.

I need to make a bet on whether or not to leave it as is at 3% until 2029, or fix it for another 7 years at 3.35%, there is €112k left on it.
 
Got paperwork for second mortgage this morning which is on 3% fixed until 2029 - no charge to break if I want to move it to a new 7 year fixed rate for 3.35%
Change in repayment is €19.35 per month
 
I'm dealing with a similar choice in terms of trying to time a new fixed contract with PTSB. The existing 2.25% rate expires in June.
PTSB offers 3.35% for either 5 or 7 years, 72K left on the mortgage with 30% LTV.
It seems there isn't much of a difference between the rates from the main banks versus what I was offered.
I hope I'm taking the right calculated risk by contemplating to refix for 5 or 7 years. I did the same thing when the conflict in Ukraine started and hence was able to escape all the rate increases.
 
Sarah Ryan said:
need to make a bet on whether or not to leave it as is at 3% until 2029, or fix it for another 7 years at 3.35%, there is €112k left on it.
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How about this. Save the extra amount you would pay monthly if you went to 3.35. From now until 2029. If rates have gone up in 2029 you use the savings to reduce the capital owing. Though in your case it can’t be much as the balance owing is so low.

Posters Cian and Atgate should do a similar exercise. Where it might be significant.

Also anyone currently fixing could/should knock off some of the capital if they have savings. Alternately consume when fixing increasing the amount of repayment to reduce the term, particularly those whose mortgages stretch into their sixties.

Do you have an amortization table? And on it you should be able to see how much you’ll owe on this date in 2029. How long more is left on that mortgage?

Thanks for showing us the mortgage letters. They are very well laid out by the bank.
 
Pawel Nowak said:
I'm dealing with a similar choice in terms of trying to time a new fixed contract with PTSB. The existing 2.25% rate expires in June.
PTSB offers 3.35% for either 5 or 7 years, 72K left on the mortgage with 30% LTV.
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as the balance is low and will be dropping considerable each year, the difference of .2% .3% is small.

Taking that there are 7 years left, (to use as an example) the jump from 2.25% to 3.35% will cost about €3000 extra over the 7 years. Every 0.1% higher/lower is close to €200 interest cost over 7 years.

In monthly payment terms every 0.1% change is about €3 on your balance of 72k over a 7 year period

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Pawel Nowak said:
72K left on the mortgage with 30% LTV.
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An increase of 1% will cost you €700 in extra interest this year.
But it will be less and less in future years as you pay down the capital with each monthly payment.
If you are likely to make capital overpayments, you should let the fixed rate expire naturally and then refix for a short term.

However, if an increase in repayments of about €100 a month might cause you financial difficulties, then you should fix.

Brendan
 
Brendan Burgess said:
An increase of 1% will cost you €700 in extra interest this year.
But it will be less and less in future years as you pay down the capital with each monthly payment.
If you are likely to make capital overpayments, you should let the fixed rate expire naturally and then refix for a short term.

However, if an increase in repayments of about €100 a month might cause you financial difficulties, then you should fix.
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I did run some numbers as I always been a proponent of overpaying my mortgage. I'm currently pondering the following I'm in a position to reduce my capital by 22k so the outstanding balance would be 50k. My reasoning is I'm getting paid 1.33% after DIRT to hold my savings in the bank but can achieve a better return via overpayment.
Since I'm on a fixed contract with PTSB their overpayment facility is slightly different than other big banks.
I was thinking about running out the fix going temporarily onto the variable rate pay the lump sum, reduce the remaining term from 13 to 10 years and refix at the best rate available.
 
Pawel Nowak said:
My reasoning is I'm getting paid 1.33% after DIRT to hold my savings in the bank but can achieve a better return via overpayment.
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Correct. If you don't need the money.

Pawel Nowak said:
I was thinking about running out the fix going temporarily onto the variable rate pay the lump sum
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Why run out the fix? You can overpay now without penalty or with such a small penalty, that it's worth paying it down now.

Pawel Nowak said:
I'm on a fixed contract with PTSB their overpayment facility is slightly different than other big banks.
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Interesting point. I hate ptsb because of their long track record in exploiting customers. But they have one thing going for them. They treat overpayments as "pre payments". In other words, if you overpay by €22k now and you need the money later, you can stop paying your mortgage until you use up the €22k.

Pawel Nowak said:
reduce the remaining term from 13 to 10 years and refix at the best rate available.
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If your monthly repayment is €1,000 over 13 years and you reduce the term, your repayment will be say €1,200.
However, if you leave it at 13 years and pay €1,200 anyway, you will build up a prepayment which might be useful later.

Check out that the terms and conditions are the same as these.

Key Post - How overpaying a ptsb mortgage works

I was vaguely aware of this but it was brought to my attention this morning by someone who is choosing ptsb because of this facility. https://www.permanenttsb.ie/globalassets/pdf-documents/mortgages/mortgage-arrears/bmk3625..-flexible-mortgage-options-aug-19..-1.05mb.pdf In simple terms, if...
www.askaboutmoney.com
 
Brendan Burgess said:
Interesting point. I hate ptsb because of their long track record in exploiting customers. But they have one thing going for them. They treat overpayments as "pre payments". In other words, if you overpay by €22k now and you need the money later, you can stop paying your mortgage until you use up the €22k.
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Wow I didn't even think a bank would do anything like that, good to know.
 
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