# No penalty for coming out of Fixed Mortgage (TSB)



## kitty81 (3 Feb 2009)

I phoned our mortgage provider (Permanent TSB) recently to make a general enquiry about coming out of our Fixed Mortgage Payments (4.8%) and reverting to the Variable Rate (4.16%) which is more favorable at the moment. I was told there was no penalty at all and they could hold that offer for 20 days for us?

I have recently spoken to a (friend) manager in TSB and he was surprised that we were offered this and said to grab the offer if we were absolutly sure there was no penalty so I phoned again today and was told that the offer is still there for us until the 20 days has expired with no penalty...

Does this seem too good to be true or has anyone else any experience of this?


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## shoppergal (3 Feb 2009)

I've also changed from a fixed rate mortgage to variable with PTSB and haven't been charged. Read on another forum I post on that a number of people aren't being charged.

No idea why but I'm not complaining.


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## irishlinks (3 Feb 2009)

Just do it. Once you are off the fixed rate you then have the option to look at othr lenders with lower rates.


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## dubrov (3 Feb 2009)

Don't be foolish here ad rush in. Banks aren't in the habit of giving out money for free. The only reason why they would offer the switch to you for free is if your urrent mortgage is less valuable to them than if you swithed.

One reason I can think of is that some fixed rate mortgages convert to trackers after X number of years. Check the contract. For example, say you went from fixed to ECB + .75% after 2 years. Even though it might sound favourable to switch now you may end up costing yirself a lot more in the long run. onsidering the variable rate is 4.16% and the ECB rate is 2%, that is a +2.16% spread which is onsiderable worse than what was available at the height of the boom.

Kitty is correct that you can swicth providers easily on a variable rate, but with the credit runch the lenders are offering nowhere near as competitive a rate as they once were.

All I am saying is have a long hard look at your contract before switching. You might be saving a bit for a few months but then costing yourslef a lot for the rest of the mortgage (20 years +)


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## irishlinks (3 Feb 2009)

Good point Dubrov - I agree - check the small print first.


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## David€advice (4 Feb 2009)

Dubrov is correct here....i've had a customer who recently approached his lender to move into a variable rate from a fixed rate, which the bank offered without penalty and after talking it through with me and checking his original loan agreement, it turned out that he had a Tracker option, which if he waits and takes this, would mean that he will have 1.5% approx lower rate than the standard variable rate, saving him thousands per year. My advice........"ALWAYS GET INDEPENDANT ADVICE", check the fine print!


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## ddmcin (13 Feb 2009)

Rang Ptsb to day to go ahead with switching from fixed to variable i'm about 10 days in to my 20 day option.  They said they are no longer honouring this option or any options put on hold from the beginning of the month anyone else got this problem????????


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## TonyD (15 Feb 2009)

This link might help:

http://www.independent.ie/business/...customers-out-of-variable-switch-1639901.html


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## IRISH VIXEN (15 Feb 2009)

There are a lot of talk about fixed rate penaltes on this site. Basically penatlies are calculated based on 


When you fixed your mortgage and the rate you got,
When you want to break out and the rate available to a bank at that time.
The term remaining on the fixed rate.
What you have left to pay on your mortgage.
If there is a breakage fee applicable no bank is going to pay it for you. Because of the varying factors everyone's fixed rate breakage fee will be different, it's possible it can be €0 depending on what rate you fixed at and how long is left to run on it but likely at the moment there will be some charges to break out, some will be substantial depending on the factors above, but they are a real cost to an institution that has to be paid and as a customer I'm not prepared to pay for someone elses decision to fix their mortgage just because they feel hard done by now that rates are falling.

See article in Irish Indo on Saturday 14 Feb 2009 re PTSB fixed rate policy. They are not even allowing customers to move to a variable rate even if you are prepared to pay the fee... Basically if your mortgage is with PTSB and you are on a fixed rate you have to pay the fee and move to another institution if you want to switch to a variable rate, which may be difficult at the moment if you have a high Loan to Value.


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## Petal (15 Feb 2009)

I was in the exact same position. Was at 4.85 and enquired about penalties and they said I could switch to variable 4.65 (at that time) and no penalties. I thought there must be a catch as banks never give away anything for free. So I then asked if I let my fixed rate expire naturally (Dec 09) would I go back on the tracker rate and YES I would. So I'm hanging in there, tracker in my opinion is the better option in the long run.


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## IRISH VIXEN (15 Feb 2009)

Sounds right; if you're moving from a fixed rate of 4.85% to a variable of 4.65% and its expiring within a year unlikley there will be a substantial or any penalty. 

However, All banks stopped offering trackers in October 2008. Unlikley PTSB will allow you back on tracker in Dec. Check the original tracker form as most have condition that once you come out of a tracker you can't go back in. If someone has agreed to allow you back on tracker in Dec 2009 I would follow up and get it in writing now.


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## Petal (15 Feb 2009)

I enquired by email (to the mortgage centre) and after asking them specifically about the tracker that's the response I received:

""Yes, when your fixed rate expires you will automatically fall onto the releveant tracker rate unless you choose an alternative rate that you choose from your options letter which will be sent to you 15 days prior to your fixed rate expiring"

I suppose I could ask for a letter to be sent out to me confirming this.


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## IRISH VIXEN (15 Feb 2009)

It could be a term of your original mortgage I would check your loan offer letters and also request confirmation in writing from them. You could have spoken to someone before the announcement was made and the info may have been correct then. I'd call them again and confirm just to be sure. It's sounds unusual for a mortgage to go straight back onto a tracker particuarly now as trackers are effectively a thing of the past most likely never to return again. Let me know how you get on.


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## Petal (15 Feb 2009)

Yeah, I have fired off an email back to them asking for confirmation in writing, just to be sure. will let you know how I get on - I only enquired about all of the above about a month ago.


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