would I have to pay a big breakage fee if I wanted to avail of their new fixed rate?
There is a thread on here which goes into the detail of how the break fees are calculated.
The lay man's version of this thread is it depends on the inter bank lending rates, and the lending rate the bank would have secured the 3% rate on, versus the new inter bank lending rate for the new 2.5% rate. The inter bank lending rates are very low currently.
So if the new low rate is a result of a further drop in the inter bank lending rate, then its likely you would have to pay a break fee
If the new low rate is as a result of competitive pressures such as a new entrant entering the market and the inter bank lending rates remaining consistent, then its likely a small or no break fee would apply
However, if you genuinely feel that interest rates are likely to drop, then you should look to stay variable or minimise your fixing period. If you feel interest rates are likely to rise, then you should be extending your fixing period.
I would advise any customer who is fixing with any bank to clearly understand what rate they will roll onto on expiry, and question any ambiguity in the language. For example if you expect to roll onto a LTV rate, is it the LTV on drawdown/fixing date or on expiry of the fixing period.
On a separate note, in 2013 I came out of a fixed rate with BOI and was sent the various options. One of these was a 10 year fixed rate @ 6.19%. This same rate is now available with KBC for 2.95%. You need to be very cautious around how long you are willing to fix for, and its not always a rate thing but also a security element to it.