Ulster Bank - break fee if I fix again, no break fee if I switch to variable?

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005404

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Quick question?

I overpaid my 10% allowance on my fixed mortgage for 2022 at beginning of the month.

My fixed mortgage is coming to an end at 2.6% at the end of September.

I was sent a letter with breakage fee of €1500 or so breakage fee today to avail of 2/4/5 year fixed rates.

My question is thus, if I choose a variable rate switch which is open to me without break fee, can I make a overpayment then seek the best fixed rates without delay?

If this is the case why does anyone pay break fee, when they could switch to a variable rate and as soon as that is implemented then request a fixed rate saving the break fee in the process.
 
005404 said:
Quick question?

I overpaid my 10% allowance on my fixed mortgage for 2022 at beginning of the month.

My fixed mortgage is coming to an end at 2.6% at the end of September.

I was sent a letter with breakage fee of €1500 or so breakage fee today to avail of 2/4/5 year fixed rates.

My question is thus, if I choose a variable rate switch which is open to me without break fee, can I make a overpayment then seek the best fixed rates without delay?

If this is the case why does anyone pay break fee, when they could switch to a variable rate and as soon as that is implemented then request a fixed rate saving the break fee in the process.
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You still have to pay the break fee when switching to variable.
 
newirishman said:
You still have to pay the break fee when switching to variable.
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As I stated my fee for switching to Variable was 0, hence why it seems to good to be true. The fixed rate offers had breakage fees attached. Thanks for reply.
 
You will have received 2 letters.

The first will state the break fee that will apply if you terminate your current fixed rate early. What rate you go to variable or fixed will have no impact on that break fee.

The second letter outlines the various rate options currently available. This letter also includes an estimated upper limited on future break fees. Ulster cap any break free at 6 months interest repayments. The different rates will have slightly different interest calculations hence the different break fees. So this letter is only a guide to what break fees might be if you were to refix. It's not the break fee on your current fixed rate.

You may be confusing the two letters. The first letter is the relevant one. If the break fee is zero you can pick any available rate in the second letter without facing an additional cost.
 
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I too suspect that you are either misreading the letters or they were sent on different dates. The break-fee changes from day to day.

However, if the one letter gives you two options - switch to a variable with no break fee or fix again with a break-fee on the existing term, it would seem like an IT problem. Switch to the variable first and then fix.

Brendan
 
They always send 2 letters.... Break fee letter and what if letter... A couple of times the what if letter has arrived before the break fee letter.

The break fee letter won't have options just a paragraph with a value in the middle of it. This is the break fee.

The what if letter gives the full table of rates across all their LTV threshold.

While it's nice to see what future monthly repayments and break fee limits, I do think it confuses more people than it informs.
 
skrooge said:
While it's nice to see what future monthly repayments and break fee limits, I do think it confuses more people than it informs.
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I totally agree.

@005404 When did you fix (month and year) and for how long? What is your outstanding balance? What is your monthly repayment (after you made the large overpayment)?
 
Yes, I got two letters after requesting a break fee.

I can see how confusion arises.
 
Paul F said:
I totally agree.

@005404 When did you fix (month and year) and for how long? What is your outstanding balance? What is your monthly repayment (after you made the large overpayment)?
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Hi guys, as always value your correspondence and expertise greatly.

Furthermore I have subsequently received 2nd letter today, my break fee is €681.66.

I owe 145k on property with 11 years 4 months remaining. I had 4 year fixed from 2018 ending at end of September. I am tempted to go variable and overpay a once off 30k and then seek fixed straight away. I am unwilling to pay breakage as this is going to reduce every day as my fixed period comes to an end. The elephant in the room though is UB leaving the market.
 
005404 said:
I am tempted to go variable and overpay a once off 30k and then seek fixed straight away. I am unwilling to pay breakage as this is going to reduce every day as my fixed period comes to an end. The elephant in the room though is UB leaving the market.
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I'm not sure if you realise this already from previous posts but you will have to pay the break fee regardless of whether you switch to a variable rate or to another fixed rate.

The break fee will fall by about €85/month, all other things being equal.
 
005404 said:
Hi guys, as always value your correspondence and expertise greatly.

Furthermore I have subsequently received 2nd letter today, my break fee is €681.66.

I owe 145k on property with 11 years 4 months remaining. I had 4 year fixed from 2018 ending at end of September. I am tempted to go variable and overpay a once off 30k and then seek fixed straight away. I am unwilling to pay breakage as this is going to reduce every day as my fixed period comes to an end. The elephant in the room though is UB leaving the market.
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Don't forget that break fee is for the entire 145k, if you overpay the allowed 10% first or if you only "break" the amount being overpaid, the fee will be smaller
 
skrooge said:
They always send 2 letters.... Break fee letter and what if letter... A couple of times the what if letter has arrived before the break fee letter.

The break fee letter won't have options just a paragraph with a value in the middle of it. This is the break fee.

The what if letter gives the full table of rates across all their LTV threshold.

While it's nice to see what future monthly repayments and break fee limits, I do think it confuses more people than it informs.
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Brendan Burgess said:
That is very interesting and very confusing.

Is that practice unique to Ulster?
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@Brendan Burgess Here is an old post that shows an example of one of the two letters – the one that tells you the maximum possible break fee (based on six months' interest). It must confuse a huge number of people and put them off switching.

Would it be possible to hassle them publicly over this and get them to change it? As it stands, many UB customers might wrongly conclude that it is not worth switching.
 
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