The break fee depends on:
- Your outstanding balance
- How long is left on the fixed-rate period
- The change in interbank interest rates (not mortgage interest rates) from when you fixed to now
So if you fix for a shorter period, your break fee will on average be lower than if you fix for a longer period. But it is possible for break fees to be low or even zero.
The big unknown in all of this is future interbank rate moves. As interbank interest rates rise, the break fee falls (all other things being equal).
But Permanent TSB have a very useful feature around overpayments (both lump sums and regular overpayments), which makes the issue of break fees largely irrelevant:
- You can overpay by as much as you like each month without penalty, and this builds up as a credit on your account
- You can use this credit to take a payment holiday or to reduce the monthly repayments (or to pay off part of the principal at the end of the fixed period)
- You are only charged mortgage interest on the net balance, i.e., on the mortgage balance after the credit has been subtracted
- See this thread for more details