Key Post Switch or re-fix my mortgage? Breakage fee calculator and savings estimates for your case (Ireland)

[masterboy123]

Current lender - AIB 5 years fixed.
Outstanding mortgage balance (how much you still owe) - €110,000
Approximate current value of your property - €270,000
The date you started your fixed-rate mortgage (month and year): May 2022
How many years you fixed for - 20 years
Your current mortgage interest rate - 2.15%
Your current monthly repayment (excluding any overpayments) - €590
Your property's BER (Building Energy Rating) - A3
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

Other query: Does AIB allow you to overpay on a fixed rate without penalty every month?

 

[Paul F]

Current lender Pepper
Outstanding mortgage balance (how much you still owe) 142k
Approximate current value of your property 375k
Your current mortgage interest rate 5.75
Your current monthly repayment (excluding any overpayments)
Your property's BER (Building Energy Rating) – B2

Currently in ARA and paying 900 per month. Living in home. Ive a part capital and full interest with them recently did CCR credit check and all clear for last 5 years so basically would like to switch to lower rate and get full payments with a lump sum due at end of mortgage.
Also ideally would like a cashback switch

@USER1981 I see you posted a thread about your situation back in June. Did you talk to a broker about switching? Did they think that you would be able to switch? If so, which lenders did they suggest would be the most likely to take you?

Below I have provided savings estimates assuming you are able to switch (which is not guaranteed). I have also assumed that you clear the mortgage in full in 14 years.

• Switching immediately to Haven's 4-year green fixed rate (2.5% with €2,000 cashback) will save you about €17,460 over the next 4 years
  • The monthly repayment would be €1,003
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to AIB's 5-year green fixed rate (2.6% with €2,000 cashback) will save you about €16,960 over the next 4 years
  • The monthly repayment would be €1,010
  • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)
  • For the same reason, it is unlikely that there will be a break fee if you break out of this fixed rate to move home within the next 5 years
  
  
• Switching immediately to Bank of Ireland's 5-year green fixed rate (2.95% with €2,840 cashback) will save you about €16,020 over the next 4 years
  • The monthly repayment would be €1,033
  • Note that Bank of Ireland 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 right now, the best rate you would be able to switch to today is 3.25%
  • 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 Permanent TSB's 5-year green fixed rate (3.15% with €2,840 initial cashback and 2% monthly cashback) will save you about €15,700 over the next 4 years
  • The monthly repayment would be €1,047
  • Note that Permanent TSB's interest rates are high, which will cost you a lot more than a cheaper lender over the long term (even accounting for the cashback)
  • So if you switch to them now, you may want to switch again to another lender in the future, 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 (2.45% with no cashback) will save you about €15,680 over the next 4 years
  • The monthly repayment would be €1,000
  
  
• Switching immediately to Avant Money's 5-year fixed rate (2.65% with no cashback) will save you about €14,660 over the next 4 years
  • The monthly repayment would be €1,013
  
  
• Switching immediately to Bank of Ireland's 10-year green fixed rate (3.25% with €2,840 cashback) will save you about €14,480 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,054
  • The same warnings as above regarding higher Bank of Ireland rates in the future apply
  
  
• Switching immediately to Haven's 7-year fixed rate (3.15% with €2,000 cashback) will save you about €14,140 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • The monthly repayment would be €1,047
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to Permanent TSB's 7-year fixed rate (3.65% with €2,840 initial cashback and 2% monthly cashback) will save you about €13,160 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • The monthly repayment would be €1,081
  • The same warnings as above regarding higher Permanent TSB rates in the future apply
  
  
• Switching immediately to Avant Money's 7-year fixed rate (2.95% with no cashback) will save you about €13,140 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • The monthly repayment would be €1,033
  
  
• Switching immediately to Haven's 10-year fixed rate (3.35% with €2,000 cashback) will save you about €13,120 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,061
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to AIB's 10-year fixed rate (3.6% with €2,000 cashback) will save you about €11,820 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,078
  
  
• Switching immediately to Avant Money's 10-year fixed rate (3.4% with no cashback) will save you about €10,820 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,064
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.4% fixed rate with no cashback) will save you about €10,820 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term (14 years)
  • The monthly repayment would be €1,064

The above Permanent TSB rates include their rate increases of 18th November 2022.

These savings estimates use for comparison the scenario of staying on the variable rate with Pepper and assume that that rate doesn't change between now and November 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.

The savings estimates also assume that you are currently repaying €1,233 monthly to Pepper, in order to simulate clearing the mortgage in full in 14 years.

All of Avant's 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).

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

If you use a broker and they tell you that your mortgage balance is too low to switch, find another broker.

 

[USER1981]

@USER1981 I see you posted a thread about your situation back in June. Did you talk to a broker about switching? Did they think that you would be able to switch? If so, which lenders did they suggest would be the most likely to take you?

Below I have provided savings estimates assuming you are able to switch (which is not guaranteed). I have also assumed that you clear the mortgage in full in 14 years.

• Switching immediately to Haven's 4-year green fixed rate (2.5% with €2,000 cashback) will save you about €17,460 over the next 4 years
  • The monthly repayment would be €1,003
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to AIB's 5-year green fixed rate (2.6% with €2,000 cashback) will save you about €16,960 over the next 4 years
  • The monthly repayment would be €1,010
  • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)
  • For the same reason, it is unlikely that there will be a break fee if you break out of this fixed rate to move home within the next 5 years
  
  
• Switching immediately to Bank of Ireland's 5-year green fixed rate (2.95% with €2,840 cashback) will save you about €16,020 over the next 4 years
  • The monthly repayment would be €1,033
  • Note that Bank of Ireland 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 right now, the best rate you would be able to switch to today is 3.25%
  • 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 Permanent TSB's 5-year green fixed rate (3.15% with €2,840 initial cashback and 2% monthly cashback) will save you about €15,700 over the next 4 years
  • The monthly repayment would be €1,047
  • Note that Permanent TSB's interest rates are high, which will cost you a lot more than a cheaper lender over the long term (even accounting for the cashback)
  • So if you switch to them now, you may want to switch again to another lender in the future, 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 (2.45% with no cashback) will save you about €15,680 over the next 4 years
  • The monthly repayment would be €1,000
  
  
• Switching immediately to Avant Money's 5-year fixed rate (2.65% with no cashback) will save you about €14,660 over the next 4 years
  • The monthly repayment would be €1,013
  
  
• Switching immediately to Bank of Ireland's 10-year green fixed rate (3.25% with €2,840 cashback) will save you about €14,480 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,054
  • The same warnings as above regarding higher Bank of Ireland rates in the future apply
  
  
• Switching immediately to Haven's 7-year fixed rate (3.15% with €2,000 cashback) will save you about €14,140 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • The monthly repayment would be €1,047
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to Permanent TSB's 7-year fixed rate (3.65% with €2,840 initial cashback and 2% monthly cashback) will save you about €13,160 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • The monthly repayment would be €1,081
  • The same warnings as above regarding higher Permanent TSB rates in the future apply
  
  
• Switching immediately to Avant Money's 7-year fixed rate (2.95% with no cashback) will save you about €13,140 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • The monthly repayment would be €1,033
  
  
• Switching immediately to Haven's 10-year fixed rate (3.35% with €2,000 cashback) will save you about €13,120 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,061
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to AIB's 10-year fixed rate (3.6% with €2,000 cashback) will save you about €11,820 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,078
  
  
• Switching immediately to Avant Money's 10-year fixed rate (3.4% with no cashback) will save you about €10,820 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,064
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.4% fixed rate with no cashback) will save you about €10,820 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term (14 years)
  • The monthly repayment would be €1,064

The above Permanent TSB rates include their rate increases of 18th November 2022.

These savings estimates use for comparison the scenario of staying on the variable rate with Pepper and assume that that rate doesn't change between now and November 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.

The savings estimates also assume that you are currently repaying €1,233 monthly to Pepper, in order to simulate clearing the mortgage in full in 14 years.

All of Avant's 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).

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

If you use a broker and they tell you that your mortgage balance is too low to switch, find another broker.

Yes I contacted a broker and they said with a clear credit report they didn't see an issue they at time talked about Finance Ireland and ICS. This may have changed. If I was approved for a switch could I extend the mortgage term by a few years to reduce monthly repayments slightly. I'd only be looking to extend by 3 or 4 years as I'd like to be mortgage free before I'm 60.

 

[Paul F]

Yes I contacted a broker and they said with a clear credit report they didn't see an issue they at time talked about Finance Ireland and ICS. This may have changed.

ICS have effectively stopped lending and Finance Ireland recently stopped offering their 10-year and longer fixed rates. (Their 3- and 5-year fixed rates are very high.)

Avant have a reputation for being picky, so they might not take you. In any case, try to find a broker who deals with all of the lenders you are considering switching to, and who has experience of helping people with a warehoused mortgage to switch lenders.

You may have to deal directly with AIB – but I'm not certain.

If I was approved for a switch could I extend the mortgage term by a few years to reduce monthly repayments slightly. I'd only be looking to extend by 3 or 4 years as I'd like to be mortgage free before I'm 60.

I think that should be possible but ask the broker. You would need to get a new mortgage protection policy with a term that matches the term of the mortgage that you are looking for.

Does your property definitely have a BER of B3 or better?

 

[USER1981]

ICS have effectively stopped lending and Finance Ireland recently stopped offering their 10-year and longer fixed rates. (Their 3- and 5-year fixed rates are very high.)

Avant have a reputation for being picky, so they might not take you. In any case, try to find a broker who deals with all of the lenders you are considering switching to, and who has experience of helping people with a warehoused mortgage to switch lenders.

You may have to deal directly with AIB – but I'm not certain.


I think that should be possible but ask the broker. You would need to get a new mortgage protection policy with a term that matches the term of the mortgage that you are looking for.

Does your property definitely have a BER of B3 or better?

It's probably better than B3. House was built in 2006..... I can't find MRPN number to check.

 

[Paul F]

Current lender - AIB 5 years fixed.
Outstanding mortgage balance (how much you still owe) - €110,000
Approximate current value of your property - €270,000
The date you started your fixed-rate mortgage (month and year): May 2022
How many years you fixed for - [I'll assume you meant 5 years]
Your current mortgage interest rate - 2.15%
Your current monthly repayment (excluding any overpayments) - €590
Your property's BER (Building Energy Rating) - A3
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

@masterboy123 Your break fee should be zero at the moment – but confirm it with AIB. If it is higher than zero, please post it here when you receive it, including the date of the letter.

I'm assuming you only wanted a break fee estimate in order to make an overpayment, and that you don't want to switch to another lender. But if you do want to switch to another lender, let me know.

Other query: Does AIB allow you to overpay on a fixed rate without penalty every month?

No, they don't. But in your particular situation the break fee should be zero at the moment. (But you always ask AIB for a break fee quote before you make an overpayment.)

 

[masterboy123]

@masterboy123 Your break fee should be zero at the moment – but confirm it with AIB. If it is higher than zero, please post it here when you receive it, including the date of the letter.

I'm assuming you only wanted a break fee estimate in order to make an overpayment, and that you don't want to switch to another lender. But if you do want to switch to another lender, let me know.


No, they don't. But in your particular situation the break fee should be zero at the moment. (But you always ask AIB for a break fee quote before you make an overpayment.)

Hi,
Thank you so much.
The break fee is zero, confirmed on 15.11.2022.

But I am looking to switch to another lender if there are good savings. I have documents ready.

 

[Paul F]

Current lender - AIB 5 years fixed.
Outstanding mortgage balance (how much you still owe) - €110,000
Approximate current value of your property - €270,000
The date you started your fixed-rate mortgage (month and year): May 2022
How many years you fixed for - [I'll assume you meant 5 years]
Your current mortgage interest rate - 2.15%
Your current monthly repayment (excluding any overpayments) - €590
Your property's BER (Building Energy Rating) - A3
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

But I am looking to switch to another lender if there are good savings. I have documents ready.

@masterboy123

• Switching immediately to AIB's 5-year green fixed rate (2.6% with no cashback) will leave you worse off by about €2,000 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
  • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)
  • For the same reason, it is unlikely that there will be a break fee if you break out of this fixed rate to move home within the next 5 years
  • You will probably need an updated property valuation
  
  
• Switching immediately to Haven's 7-year fixed rate (3.15% with €2,000 cashback) will leave you worse off by about €3,580 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to Bank of Ireland's 10-year green fixed rate (3.25% with €2,200 cashback) will leave you worse off by about €3,800 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • Note that Bank of Ireland 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 right now, the best rate you would be able to switch to today is 3.25%
  • 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 Haven's 10-year fixed rate (3.35% with €2,000 cashback) will leave you worse off by about €4,400 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to Avant Money's 7-year fixed rate (2.95% with no cashback) will leave you worse off by about €4,780 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Permanent TSB's 7-year fixed rate (3.65% with €2,200 initial cashback and 2% monthly cashback) will leave you worse off by about €5,100 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Note that Permanent TSB's interest rates are high, which will cost you a lot more than a cheaper lender over the long term (even accounting for the cashback)
  • So if you switch to them now, you may want to switch again to another lender in the future, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated)
  
  
• Switching immediately to AIB's 7-year fixed rate (3.45% with no cashback) will leave you worse off by about €5,520 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).
  • You will probably need an updated property valuation
  
  
• Switching immediately to AIB's 10-year fixed rate (3.6% with no cashback) will leave you worse off by about €6,140 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).
  • You will probably need an updated property valuation
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.4% fixed rate with no cashback) will leave you worse off by about €6,500 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term
  • You would have to shorten your mortgage term to 15 years to be eligible for this rate
  • The monthly repayment would be €781
  
  
• Switching immediately to Avant Money's 10-year fixed rate (3.4% with no cashback) will leave you worse off by about €6,640 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €657
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.5% fixed rate with no cashback) will leave you worse off by about €7,060 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term (approximately 19 years)
  • The monthly repayment would be €663

The above Permanent rates include their rate increases of 18th November 2022.

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 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).

Most of the above lenders will probably only let you switch to them if you have had a mortgage with your current lender for at least 12 months. See this thread for more details. If they are inflexible on that policy (talk to a broker), you will be unable to switch (for the moment).

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

Dates of the most-recent interest rate increases:

• Permanent TSB: 18th November 2022
• Bank of Ireland: 10th November 2022
• AIB, EBS and Haven: 14th October 2022
• Avant: 15th August 2022 and 16th May 2022

Even though it is usually quick to re-fix with your current lender, it is still possible for rates to rise while you are in the middle of the process.

If you use a broker and they tell you that your mortgage balance is too low to switch, find another broker.

In conclusion: You can see that all switches will leave you worse off over the next four years (and in any case you may not be able to switch). Probably the only reason for you to consider switching is if you really value the security of a long-term fixed rate, even at the expense of a higher interest rate. (A long-term fixed rate is not a good idea if you think you will move home in the next few years, unless it's an Avant fixed rate.)

 

[masterboy123]

@masterboy123

• Switching immediately to AIB's 5-year green fixed rate (2.6% with no cashback) will leave you worse offby about €2,000 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
  • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)
  • For the same reason, it is unlikely that there will be a break fee if you break out of this fixed rate to move home within the next 5 years
  • You will probably need an updated property valuation
  
  
• Switching immediately to Haven's 7-year fixed rate (3.15% with €2,000 cashback) will leave you worse off by about €3,580 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to Bank of Ireland's 10-year green fixed rate (3.25% with €2,200 cashback) will leave you worse off by about €3,800 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • Note that Bank of Ireland 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 right now, the best rate you would be able to switch to today is 3.25%
  • 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 Haven's 10-year fixed rate (3.35% with €2,000 cashback) will leave you worse off by about €4,400 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to Avant Money's 7-year fixed rate (2.95% with no cashback) will leave you worse off by about €4,780 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Permanent TSB's 7-year fixed rate (3.65% with €2,200 initial cashback and 2% monthly cashback) will leave you worse off by about €5,100 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Note that Permanent TSB's interest rates are high, which will cost you a lot more than a cheaper lender over the long term (even accounting for the cashback)
  • So if you switch to them now, you may want to switch again to another lender in the future, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated)
  
  
• Switching immediately to AIB's 7-year fixed rate (3.45% with no cashback) will leave you worse off by about €5,520 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).
  • You will probably need an updated property valuation
  
  
• Switching immediately to AIB's 10-year fixed rate (3.6% with no cashback) will leave you worse off by about €6,140 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).
  • You will probably need an updated property valuation
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.4% fixed rate with no cashback) will leave you worse off by about €6,500 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term
  • You would have to shorten your mortgage term to 15 years to be eligible for this rate
  • The monthly repayment would be €781
  
  
• Switching immediately to Avant Money's 10-year fixed rate (3.4% with no cashback) will leave you worse off by about €6,640 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €657
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.5% fixed rate with no cashback) will leave you worse off by about €7,060 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term (approximately 19 years)
  • The monthly repayment would be €663

The above Permanent rates include their rate increases of 18th November 2022.

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 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).

Most of the above lenders will probably only let you switch to them if you have had a mortgage with your current lender for at least 12 months. See this thread for more details. If they are inflexible on that policy (talk to a broker), you will be unable to switch (for the moment).

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

Dates of the most-recent interest rate increases:

• Permanent TSB: 18th November 2022
• Bank of Ireland: 10th November 2022
• AIB, EBS and Haven: 14th October 2022
• Avant: 15th August 2022 and 16th May 2022

Even though it is usually quick to re-fix with your current lender, it is still possible for rates to rise while you are in the middle of the process.

If you use a broker and they tell you that your mortgage balance is too low to switch, find another broker.

In conclusion: You can see that all switches will leave you worse off over the next four years (and in any case you may not be able to switch). Probably the only reason for you to consider switching is if you really value the security of a long-term fixed rate, even at the expense of a higher interest rate. (A long-term fixed rate is not a good idea if you think you will move home in the next few years, unless it's an Avant fixed rate.)

Thanks so much for the detailed information.

It's good to see I am having the best deal already in the market and everything else will leave me worse off.

I will hold on to my AIB 5 year fixed and try to do overpayments every 6 months or so (after confirming a zero break fee from the bank).
Have a great Sunday!

 

[talulon]

Hi Paul,

a bit late to the party but trying to get my mortgage switched.

• Current lender BOI
• If your current lender is Permanent TSB, was your mortgage transferred to them from Ulster Bank?
• Outstanding mortgage balance (how much you still owe) 279K
• Approximate current value of your property 410k
• The date you started your fixed-rate mortgage (month and year) 1/12/2018
• How many years you fixed for 5
• Your current mortgage interest rate 3%
• Your current monthly repayment (excluding any overpayments) 1156.51
• Your property's BER (Building Energy Rating) – 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? 1% after 5 years

Thanks!

 

[LMHDIY]

Looking for advice/options. Wondering if there are any fixed term options available to me that would make it worthwhile switching (taking upfront fees of legal fees + valuation fees into account) ? Should only the cashback ones be considered in this case?


Current lender - AIB variable.
Outstanding mortgage balance (how much you still owe) - €125,000
Approximate current value of your property - €970,000
The date you started your variable rate mortgage (month and year): April 2021
How many years left - 17 years
Your current mortgage interest rate - 2.75%
Your current monthly repayment (excluding any overpayments) - €780
Your property's BER (Building Energy Rating) – A2
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

 

[HouseBuyer10]

• Current lender: AIB
• Outstanding mortgage balance (how much you still owe): 152K
• Approximate current value of your property: 360K
• The date you started your fixed-rate mortgage (month and year): April 2021
• How many years you fixed for: 3
• Your current mortgage interest rate: 2.35
• Your current monthly repayment (excluding any overpayments): €1,095
• Your property's BER (Building Energy Rating): C2
• Are you due to get extra cashback from your current lender in the future? No

Thank you.

 

[Paul F]

• Current lender BOI
• If your current lender is Permanent TSB, was your mortgage transferred to them from Ulster Bank?
• Outstanding mortgage balance (how much you still owe) 279K
• Approximate current value of your property 410k
• The date you started your fixed-rate mortgage (month and year) 1/12/2018
• How many years you fixed for 5
• Your current mortgage interest rate 3%
• Your current monthly repayment (excluding any overpayments) 1156.51
• Your property's BER (Building Energy Rating) – 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? 1% after 5 years

@talulon Your break fee should be zero at the moment – but 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 (2.95% with €5,580 initial cashback and 2% monthly cashback) will save you about €4,500 over the next 4 years
  • Note that Permanent TSB's interest rates are high, which will cost you a lot more than a cheaper lender over the long term (even accounting for the cashback)
  • So if you switch to them now, you may want to switch again to another lender in the future, 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 (2.55% with no cashback) will save you about €2,400 over the next 4 years
  • You would have to shorten your mortgage term to 30 years to be eligible for this rate
  • The monthly repayment would be €1,110
  
  
• Re-fixing immediately on Bank of Ireland's 5-year fixed rate (3.0% and you would get the 1% (€3,000) cashback) will save you about €2,000 over the next 4 years, and it will "reset the clock" on the fixed-rate period. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
  
  
• Switching immediately to Avant Money's 5-year fixed rate (2.75% with no cashback) will save you about €240 over the next 4 years
  • You would have to shorten your mortgage term to 30 years to be eligible for this rate
  • The monthly repayment would be €1,139
  
  
• Switching immediately to Bank of Ireland's 10-year fixed rate (3.3% and you would get the 1% (€3,000) cashback) will leave you worse off by about €1,420 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 AIB's 4-year fixed rate (3.2% with €2,000 cashback) will leave you worse off by about €2,640 over the next 4 years
  
  
• Switching immediately to Avant Money's 7-year fixed rate (3.05% with no 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
  • You would have to shorten your mortgage term to 30 years to be eligible for this rate
  • The monthly repayment would be €1,184
  
  
• Switching immediately to Avant Money's 10-year fixed rate (3.5% with no cashback) will leave you worse off by about €7,960 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • You would have to shorten your mortgage term to 30 years to be eligible for this rate
  • The monthly repayment would be €1,253
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.65% fixed rate with no cashback) will leave you worse off by about €9,600 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term
  • You would have to shorten your mortgage term to 30 years to be eligible for this rate
  • The monthly repayment would be €1,276

Bank of Ireland's rate increases of 10th November 2022 do not apply to existing BOI customers who want to re-fix (for the moment), and so they have not been applied when generating the above estimates. This benefit could be removed quite soon.

These savings estimates use for comparison the scenario of switching to a 3.25% rate with Bank of Ireland when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 3.25% rate in December 2023 – it could be higher (or lower). You would get the Bank of Ireland €3,000 future cashback in such a scenario, and the savings estimates account for this. 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 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).

The estimates also assume that your loan-to-value ratio (LTV) really is below 70% in order to be eligible for the listed Avant rates. (You are already eligible, from an LTV perspective, for all of the other listed rates.) Your LTV estimate is 279.0k/410.0k = 68.0%. If you get a valuation of less than €399k, you will need to make a few more monthly mortgage payments and/or a lump sum overpayment to get the LTV below 70%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.

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

Dates of the most-recent interest rate increases:

• AIB, EBS and Haven: 25th November 2022 and 14th October 2022
• Permanent TSB: 18th November 2022
• Bank of Ireland: 10th November 2022
• Avant: 15th August 2022 and 16th May 2022

Even though it is usually quick to re-fix with your current lender, it is still possible for rates to rise while you are in the middle of the process, which could potentially leave you worse off than if you had done nothing. Ask Bank of Ireland if they will guarantee today's rates for you if you start the process of re-fixing with them.

 

[Paul F]

Current lender - AIB variable.
Outstanding mortgage balance (how much you still owe) - €125,000
Approximate current value of your property - €970,000
The date you started your variable rate mortgage (month and year): April 2021
How many years left - 17 years
Your current mortgage interest rate - 2.75%
Your current monthly repayment (excluding any overpayments) - €780
Your property's BER (Building Energy Rating) – A2
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

@LMHDIY Because you are on a variable-rate mortgage, you do not have to pay a break fee.

• Switching immediately to Bank of Ireland's 5-year green fixed rate (2.95% with €2,500 cashback) will save you about €120 over the next 4 years
  • Note that Bank of Ireland 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 right now, the best rate you would be able to switch to today is 3.25%
  • 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 (2.45% with no cashback) will leave you worse off by about €120 over the next 4 years
  
  
• Switching immediately to Avant Money's 5-year fixed rate (2.65% with no cashback) will leave you worse off by about €1,040 over the next 4 years
  
  
• Switching immediately to Bank of Ireland's 10-year green fixed rate (3.25% with €2,500 cashback) will leave you worse off by about €1,280 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The same warnings as above regarding higher Bank of Ireland rates in the future apply
  
  
• Switching immediately to AIB's 5-year green fixed rate (3.1% with no cashback) will leave you worse off by about €1,780 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
  • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)
  • For the same reason, it is unlikely that there will be a break fee if you break out of this fixed rate to move home within the next few years
  
  
• Switching immediately to Avant Money's 7-year fixed rate (2.95% with no cashback) will leave you worse off by about €2,420 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Haven's 7-year fixed rate (3.65% with €2,000 cashback) will leave you worse off by about €3,640 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.4% fixed rate with no cashback) will leave you worse off by about €4,460 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term
  • You would have to shorten your mortgage term to 15 years to be eligible for this rate
  • The monthly repayment would be €887
  
  
• Switching immediately to Avant Money's 10-year fixed rate (3.4% with no cashback) will leave you worse off by about €4,500 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €820
  
  
• Switching immediately to Haven's 10-year fixed rate (3.85% with €2,000 cashback) will leave you worse off by about €4,560 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.5% fixed rate with no cashback) will leave you worse off by about €4,980 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term (approximately 17 years)
  • The monthly repayment would be €826
  
  
• Switching immediately to AIB's 7-year fixed rate (3.95% with no cashback) will leave you worse off by about €5,740 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 AIB's 10-year fixed rate (4.1% with no cashback) will leave you worse off by about €6,440 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).

The above AIB and Haven rates include their rate increases of 25th November 2022.

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 November 2026, which is very unlikely. Therefore, fixing with AIB or switching to another lender is worth considering. 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 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).

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

Dates of the most-recent interest rate increases:

• AIB, EBS and Haven: 25th November 2022 and 14th October 2022
• Permanent TSB: 18th November 2022
• Bank of Ireland: 10th November 2022
• Avant: 15th August 2022 and 16th May 2022

If you use a broker and they tell you that your mortgage balance is too low to switch, find another broker.

 

[Paul F]

• Current lender: AIB
• Outstanding mortgage balance (how much you still owe): 152K
• Approximate current value of your property: 360K
• The date you started your fixed-rate mortgage (month and year): April 2021
• How many years you fixed for: 3
• Your current mortgage interest rate: 2.35
• Your current monthly repayment (excluding any overpayments): €1,095
• Your property's BER (Building Energy Rating): C2
• Are you due to get extra cashback from your current lender in the future? No

@HouseBuyer10 Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with AIB. If it is higher than zero, please post it here when you receive it, including the date of the letter.

• Switching immediately to Avant Money's 4-year fixed rate (2.45% with no cashback) will save you about €1,320 over the next 4 years
  
  
• Switching immediately to Permanent TSB's 5-year fixed rate (3.25% with €3,040 initial cashback and 2% monthly cashback) will save you about €860 over the next 4 years
  • Note that Permanent TSB's interest rates are high, which will cost you a lot more than a cheaper lender over the long term (even accounting for the cashback)
  • So if you switch to them now, you may want to switch again to another lender in the future, 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 (2.65% with no cashback) will save you about €240 over the next 4 years
  
  
• Switching immediately to Avant Money's 7-year fixed rate (2.95% with no cashback) will leave you worse off by about €1,400 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Bank of Ireland's 10-year fixed rate (3.55% with €3,040 cashback) will leave you worse off by about €1,600 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • Note that Bank of Ireland 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 right now, the best rate you would be able to switch to today is 3.25%
  • 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 – albeit only for the final few years of your mortgage.
  
  
• Switching immediately to AIB's 5-year fixed rate (3.35% with no cashback) will leave you worse off by about €2,240 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 Avant Money's 10-year fixed rate (3.4% with no cashback) will leave you worse off by about €3,860 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 3.4% fixed rate with no cashback) will leave you worse off by about €3,860 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term (approximately 14 years)
  
  
• Switching immediately to AIB's 7-year fixed rate (3.95% with no cashback) will leave you worse off by about €5,560 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 AIB's 10-year fixed rate (4.1% with no cashback) will leave you worse off by about €6,380 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).

The above AIB and Haven rates include their rate increases of 25th November 2022.

These savings estimates use for comparison the scenario of switching to a 3.35% rate with AIB when the current fixed rate ends. And that's assuming that AIB are even offering a 3.35% rate in April 2024 – 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 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).

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

Dates of the most-recent interest rate increases:

• AIB, EBS and Haven: 25th November 2022 and 14th October 2022
• Permanent TSB: 18th November 2022
• Bank of Ireland: 10th November 2022
• Avant: 15th August 2022 and 16th May 2022

If you use a broker and they tell you that your mortgage balance is too low to switch, find another broker.

 

[BagzOfNoMoney]

Hi Paul,
Many many thanks for this. And apologies for responding so slowly [for some reason, I did not get a notification about the reply]. Is there a spreadsheet or similar that allows me to plug in different wholesale rates ["Funding Cost" as per Finance Ireland's terminology] and see how things change? Ideally, I'd also like to plug in other costs such as valuation cost and solicitor's fees, etc.

Finance Ireland have not (yet) responded to my email request for a break fee quote. I'll come back and update this post, when they do.

Probably of interest to no-one, at this point. But I'd promised to come back and update this post.

We finally did get our switch done, from Finance Ireland (at 2.75%) to Haven 4-yr fixed (at 2%). From around the middle of April to 15-November, it took a whole 7 months. We barely squeaked in before the deadline set by Haven, in October 2023, to finish drawdown within 30 days. The final fixed rate breakage fees, charged by Finance Ireland, was zero. But they simply would not respond to any queries via email. And the phone lines were perpetually busy too. I'm not sure if that's the standard way of doing things, but it sure seemed like they were going out of their way to be slow. They even sent the wrong title deed to my solicitor (which of course, meant another round of contacting them and requesting the correct document).

 

[boomshine]

• Current lender: PTSB (Was Ulster Bank)
• Outstanding mortgage balance (how much you still owe): 209,000
• Approximate current value of your property: 370,000
• The date you started your fixed-rate mortgage (month and year): 01/2021
• How many years you fixed for: 2 yrs. - apparently ends on March 2023
• Your current mortgage interest rate: 2.25%
• Your current monthly repayment (excluding any over payments): 837 (I made no overpayments ever)
• Your property's BER (Building Energy Rating) – check it here or estimate it if necessary: A2
• Are you due to get extra cashback from your current lender in the future: No

Thank you so much for the help you give here.

 

[iamaspinner]

But what penalty would/could they charge you if you made more than 2 overpayments per year? Is there anything in your mortgage contract about penalties? (I'm not talking about breakage costs by overpaying by more than 10% of the balance. I'm wondering if the contract has any other penalty clauses.)


Are you sure that you are understanding this part correctly? Break fee quotes are determined primarily by interbank interest rates, and most lenders say that their quotes only remain valid for about 10 days. It would be very strange for Avant to say that their quote was valid until the end of the year.

I finally got around to asking Avant a second time, and a different person confirmed there would be no penalty or breakage fee if I overpaid by more than 10% and that it was valid for the remainder of 2022.

So I went ahead and made a 2nd payment that meant going over the 10%. I still haven't been notified of any penalties or breakage costs.

 

[Sean Og2]

Hi Paul F , I am switching again to get some cash back cash for Xmas. I have both BOI and PTSB approval. Both are for fixed rates as cashback only seems possible with Fixed rates. If I take out BOI mortgage first and then switch to PTSB IN 6 weeks time will there be a breakage fee with BOI? With rates changing and going up every couple of months what do you think?
Thanks Sean Og the switching King

 

[Paul F]

Hi Paul F , I am switching again to get some cash back cash for Xmas. I have both BOI and PTSB approval. Both are for fixed rates as cashback only seems possible with Fixed rates. If I take out BOI mortgage first and then switch to PTSB IN 6 weeks time will there be a breakage fee with BOI?

@Sean Og2 If you don't know the answer to that question you have no business attempting multiple switches.