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

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@Interest%
  • About €1,000 to €1,500 in solicitors' fees. Shop around. Try this thread for some names.
  • About €150 to €180 for the valuation fee
  • About €150 to €250 if you are going for a green mortgage and need a new BER cert
 
Folks

This thread is about the cost of breaking a fixed rate early. Please don't take it off in other directions about which mortgage to choose. There are plenty of other threads on that topic.

Brendan
 
Brendan Burgess said:
Folks

This thread is about the cost of breaking a fixed rate early. Please don't take it off in other directions about which mortgage to choose. There are plenty of other threads on that topic.

Brendan
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Sorry I am new to this I did not know the rules.

thanks
 
Interest% said:
Can someone please calculate my break Fee.
PTSB.
3Yr Fixed
Exactly 1 yr into 3 yr fixed
Rate 2.95%
Outstanding balance 279K


Thanks..
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Can anyone give an a worked example of the calculation used to work of the break fee with my figures. Thanks.
Iv tried and failed.
 
Interest% said:
Can anyone give an a worked example of the calculation used to work of the break fee with my figures. Thanks.
Iv tried and failed.
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The formula for the break fee is always similar to
A*(R-R1)*Y
where
  • Y is the number of years until the end of the fixed rate (approximately 2)
  • A is the outstanding mortgage balance (€279,000)
  • R is the 3-year interbank rate available to the lender in Nov 2020 (approximately -0.507%)
  • R1 is the 2-year interbank rate available to the lender now (approximately -0.379%). We use the 2-year rate because it's the one closest to Y.
Like other people here I use this site to estimate the interbank rates.

So the break fee estimate is A*(R-R1)*Y = 279000*(-0.507 - (-0.379))/100*2 = -€714

The break fee can never be negative (PTSB aren't going to pay you for breaking!), so therefore it is zero.
 
Paul F said:
The formula for the break fee is always similar to
A*(R-R1)*Y
where
  • Y is the number of years until the end of the fixed rate (approximately 2)
  • A is the outstanding mortgage balance (€279,000)
  • R is the 3-year interbank rate available to the lender in Nov 2020 (approximately -0.507%)
  • R1 is the 2-year interbank rate available to the lender now (approximately -0.379%). We use the 2-year rate because it's the one closest to Y.
Like other people here I use this site to estimate the interbank rates.

So the break fee estimate is A*(R-R1)*Y = 279000*(-0.507 - (-0.379))/100*2 = -€714

The break fee can never be negative (PTSB aren't going to pay you for breaking!), so therefore it is zero.
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Thank you so very much.
The stumbling blocks i had was where do i get the R & R1 values.
In PTSB case its I & S. Formula they use C = (I-S) x R x (M-T)/12
 
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Paul F said:
The formula for the break fee is always similar to
A*(R-R1)*Y
where
  • Y is the number of years until the end of the fixed rate (approximately 2)
  • A is the outstanding mortgage balance (€279,000)
  • R is the 3-year interbank rate available to the lender in Nov 2020 (approximately -0.507%)
  • R1 is the 2-year interbank rate available to the lender now (approximately -0.379%). We use the 2-year rate because it's the one closest to Y.
Like other people here I use this site to estimate the interbank rates.

So the break fee estimate is A*(R-R1)*Y = 279000*(-0.507 - (-0.379))/100*2 = -€714

The break fee can never be negative (PTSB aren't going to pay you for breaking!), so therefore it is zero.
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If there are 16 months left on the fixed rate term them R1 = we would use the 1 year interbank rate and if 22 months left then R1 = we use the 2 year interbank rate. Would that be correct.
Also do we user Euro Rates 1100 or Euro Rates 1200 on the ICE Report Center
 
Do I understand correctly that the break fee for AIB's three year fixed rate is still zero due to the methodology they are applying?

Trying to remortgage back home for 10 years at 0,8 % and clearing the Irish mortgage.
 
Merowig said:
Do I understand correctly that the break fee for AIB's three year fixed rate is still zero due to the methodology they are applying?
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If their current 2 year rate is more than the 3 year rate you are paying, then yes there should be zero break fee.
 
Asking for my daughter who fixed with AIB this February for 5 years at 2.45% and now hopes to switch to Avant 1.95%
5 year fixed rate 29 years remaining balance 295K.
Will one of the mathematicians posting here let me know will she have to pay a break fee.
 
@lukas888
It's zero. Note, this is an anomaly unique to AIB. They calculate the break fee using 2 different methods, and give you the most advantageous. Because their 4 year rate is currently higher than the 5 year rate, they can't charge a break fee in the scenario you have.
 
RedOnion said:
@lukas888
It's zero. Note, this is an anomaly unique to AIB. They calculate the break fee using 2 different methods, and give you the most advantageous. Because their 4 year rate is currently higher than the 5 year rate, they can't charge a break fee in the scenario you have.
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Thanks Red Onion, much appreciated.
 
lukas888 said:
Asking for my daughter who fixed with AIB this February for 5 years at 2.45% and now hopes to switch to Avant 1.95%
5 year fixed rate 29 years remaining balance 295K.
Will one of the mathematicians posting here let me know will she have to pay a break fee.
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What about AIBs 4 yr fixed high value mortgage @ 2.15%, no solicitors fees as not switching providers. And possibly no break fees.
""Existing AIB PDH customers can avail of the Rate if the remaining balance on the mortgage is at least €250,000 and a term of 4 years or more remains on the mortgage loan when actioning your request."
 
Interest% said:
What about AIBs 4 yr fixed high value mortgage @ 2.15%, no solicitors fees as not switching providers. And possibly no break fees.
""Existing AIB PDH customers can avail of the Rate if the remaining balance on the mortgage is at least €250,000 and a term of 4 years or more remains on the mortgage loan when actioning your request."
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The 2.15% rate is for an LTV<=50%.

For LTV<=80% it's 2.2%, and for LTV>80% it's 2.3%

@lukas888 What is your daughter's LTV? What is the BER of her property?
 
Hi all,

Anyone that can predict the breakage fee from ptsb 3 year fixed? 1 year 8 months left 2.8%. Going to go for 10 year @ 2.1%. 133000 left <60%

Thanks!
 
Rationaleyes said:
Anyone that can predict the breakage fee from ptsb 3 year fixed? 1 year 8 months left 2.8%. Going to go for 10 year @ 2.1%. 133000 left <60%
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Your break fee should be zero.

What is your BER?

There is talk in another thread that Avant may offer some cashback to switchers, possibly starting in Q1 of 2022.
 
Paul F said:
Your break fee should be zero.

What is your BER?

There is talk in another thread that Avant may offer some cashback to switchers, possibly starting in Q1 of 2022.
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Thats great thanks Paul. I had guessed as much but when I mentioned thats what I assumed to my solicitor they were incredulous and wanted to be certain! BER is B2. Well I will certainly look into that thread and hold off where it makes sense. The broker is working on getting a list from AVANT to me of potential mortgages at the moment and will ask after I get that list.
 
Rationaleyes said:
Thats great thanks Paul. I had guessed as much but when I mentioned thats what I assumed to my solicitor they were incredulous and wanted to be certain! BER is B2. Well I will certainly look into that thread and hold off where it makes sense. The broker is working on getting a list from AVANT to me of potential mortgages at the moment and will ask after I get that list.
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How long is left on your mortgage? (Or what is your monthly repayment?)
 
I wouldn't worry too much about the 10% limit. I've been with KBC and overpaying past the 10% limit by thousands for the last 3-4 years and only had to pay a penalty twice, about €8.50 all together. It's worth it.
 
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