BOI quoting high fixed rate break fees

D

Dara11

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Hey guys. Bank of Ireland today quoted me €7400 to break out of my 5 yr 3% fixed rate mortgage, which I took out in Feb 2018 (2 yrs 8 months remaining). I was shocked, as I thought, based on the their calculation method (although hard to work out) it would be €500-700. The redemption figure quoted was 338k including the break fee. I figured the inter bank rates have not have changed dramatically, although maybe I am wrong. Also, do they not have to offer a fair retail based approach (as per AIB)? Is this something I could take up with the Financial Ombudsman? I am waiting for a written breakdown in the post from BOI. Thanks
 
That’s very high.. i want to switch from BOI and will face a similar situation (3 years left on a 5 year fixed 3% rate)...be interested to know how you get on..
 
BOI have said their cost of funds was 0.41% at the time (Feb 18) and their investment return today would be -0.47% giving a difference of 0.88%. I thought ECB interest rates have been negative since 2014!! Not sure if BOI have to provide proof of this cost of funds on their mortgage offer (due to 2016 mortgage credit directive) or what the craic is! Very frustrating though considering AIB are letting people of the hook, according to various articles online
 
For what its worth I incurred a large breakage fee with BOI of over 8k. I took out the mortgage in 2014 and fixed like half of my mortgage on 10 year fixed. In any case I put a complaint to BOI in writing and they reviewed the calculation and found in favour of themselves obviously ;).
 
Dara11 said:
BOI have said their cost of funds was 0.41% at the time (Feb 18) and their investment return today would be -0.47% giving a difference of 0.88%. I thought ECB interest rates have been negative since 2014!! Not sure if BOI have to provide proof of this cost of funds on their mortgage offer (due to 2016 mortgage credit directive) or what the craic is! Very frustrating though considering AIB are letting people of the hook, according to various articles online
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  1. BoI do not as standard quote the prevailing cost of funds when they offer you various fixed rates but they are obliged to on request in writing due to an FPSO ruling.
  2. Check carefully their worked example. They gave me one once which was completely wrong.
 
If I wait another year to break out of a 5 year rate ...currently 3 years left and quoted 6k to break now with BOI should it be a lesser break fee then ?
 
Society said:
If I wait another year to break out of a 5 year rate ...currently 3 years left and quoted 6k to break now with BOI should it be a lesser break fee then ?
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All else equal, yes. If the rate the bank gets to put funds on deposit doesn't change in the next year then the cost to you will be lower as there is less time left to run.

However interest rates could be different in a year's time..........
 
Similar position here, have 3 years left on 3% rate fixed July 2018, with 210k left on mortgage and getting quoted €4,670 break cost... would love to switch but just going to have to keep an eye on rates over the next few months and weigh it up with switching offers from other banks...
 
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