Basic mortgage question

Hi,
We took out a 3 year fixed mortgage with Avant at 3.35% around 16 months ago.

A few general questions I have around the mortgage processs:
1. At the end of the 3 years do we just default to Avants variable interest rate unless we agree with them to fix again at the lapsing of the 3 year term?
2. If we do decide to fix with them again will we have to pay any more fees?
3. If we decide we will not continue with Avant after the 3 years are up, can we in the months leading up to the end of the 3 year term agree to go with another mortgage provider on expiration of the 3 year term so that we basically go from one fixed rate term to another?
4. Is there a cost at the end of the 3 years if we switch provider? Any estimate of these costs?
5. If we decided to switch mid term to another provider because there was a big drop in rates, what costs do we need to consider to get a true calculation of our cost saving. I’m thinking a breakage fee and would we need to go get the house valued again and pay a valuation fee.

Thanks

JimmyCorkhill said:

1. At the end of the 3 years do we just default to Avants variable interest rate unless we agree with them to fix again at the lapsing of the 3 year term?

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Yes, you default to the variable rate if you take no action.

JimmyCorkhill said:

2. If we do decide to fix with them again will we have to pay any more fees?

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No fees if your fixed term is up

JimmyCorkhill said:

3. If we decide we will not continue with Avant after the 3 years are up, can we in the months leading up to the end of the 3 year term agree to go with another mortgage provider on expiration of the 3 year term so that we basically go from one fixed rate term to another?

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Yes, this is exactly what you should be doing. You are essentially getting AIP from another lender will will be valid for ~6 months so you should get everything organised in advance of the fixed term ending

JimmyCorkhill said:

4. Is there a cost at the end of the 3 years if we switch provider? Any estimate of these costs?

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Yes, you will need a solicitor for a new mortgage so it will be in the region of €1200-1600.

JimmyCorkhill said:

5. If we decided to switch mid term to another provider because there was a big drop in rates, what costs do we need to consider to get a true calculation of our cost saving. I’m thinking a breakage fee and would we need to go get the house valued again and pay a valuation fee.

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Just be aware you can switch mid term with Avant if their own rates drop. You just need to check if a break fee applies

The costs to you are a potential break fee, the solicitors fee and a valuation. You need to balance this with the interest rate reduction and/or any cash back you may receive when switching

_OkGo_ said:

Yes, you default to the variable rate if you take no action.


No fees if your fixed term is up


Yes, this is exactly what you should be doing. You are essentially getting AIP from another lender will will be valid for ~6 months so you should get everything organised in advance of the fixed term ending


Yes, you will need a solicitor for a new mortgage so it will be in the region of €1200-1600.


Just be aware you can switch mid term with Avant if their own rates drop. You just need to check if a break fee applies

The costs to you are a potential break fee, the solicitors fee and a valuation. You need to balance this with the interest rate reduction and/or any cash back you may receive when switching

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Thank you, a very helpful reply.

So if I have understood it correctly, if we stay with Avant after the 3 years and move to another fixed rate term with them or even move to their variable rate there will be no need to pay solicitor fees or valuation fees?

We have made a couple of small overpayments too, I presume it will be easy enough to get from Avant how much principal we will have left at the end of the 3 years and presumably this will be the amount we will be looking to get a mortgage for once the initial 3 years is up if we decide to look elsewhere for a fixed term?

Legal fees are if you switch lender.

If you leave Avant, and switch to AIB, etc., you must repay the Avant mortgage, and raise a new mortgage.

The redemption of the previous mortgage, and the raising of a new mortgage, requires a solicitor.



Within a lener, you could switch rates between fixed and variable multiple times during a 30-year mortgage, with no fees, other than possible break fees on fixed rates.

If you leave Avant, they will give you a redemption figure.