Not sure these details are relevant to the query per se but;Which lender?
What is the amount of the mortgage?
What is their lowest variable rate?
How long do you have left on your fixed rate?
Could you, for example, break out now and fix again for one year, so any break fee would be small.
Brendan
Ring UB and ask for the break fee again - once the letter has been generated, they can tell you over the phone. To put this in context, the letter from UB when I requested a break fee never arrived, and for many others it has arrived only just before or indeed after the quote has run out.UB breakage fee: TBC. Redemption statement due in post by end of this week (UB couldn't qoute it over the phone at point of request).
UB break fee already requested Friday last, takes up to 5 working days to be generated before being posted out. It's still being generated (checked today) but once generated it'll be available over the phone so I'll check tomorrow and Wed.Ring UB and ask for the break fee again - once the letter has been generated, they can tell you over the phone. To put this in context, the letter from UB when I requested a break fee never arrived, and for many others it has arrived only just before or indeed after the quote has run out.
You can accept the fee over the phone too.
Correct@gargoil7 I'm going to assume you fixed with Ulster Bank in August 2020. Please tell me if that is incorrect.
Music to my ears, thank you @Paul F !Your Ulster Bank break fee should be zero.
I just rechecked on Karl's Mortgage Calculator & a mortgage of €280k (IE a UB overpayment of €15k from €295k) at 1.95% over 24 years would give a €1218 monthly . How did you calculate €1261?I don't think your UB monthly repayment falls to €1216 with a €15k overpayment – I think it falls to €1261.
Not much in it from a net balance perspective then.But let's assume you make that €15k overpayment before switching.
Looking at the AIB 2.1% green 5-year fixed rate (2.1% and €2k cashback) and the Avant 7-year fixed rate (1.95%):
- In 5 years time, you will have saved virtually the same amount regardless of which one you pick
- In 7 years time, you will be better off with the Avant product by about €650 (that's assuming you can get a 2.1% rate with AIB when the 5-year fixed rate ends)
Would you mind sharing the calculation behind the €2650 figure? From my own comparison calculations for a mortgage of €280k over 24yrs (after €2k cashback is put 100% towards the monthly repayments & without making any other overpayments):Comparing the Avant 1.95% and the Avant 2.1%, you'll be worse off by about €2,650 after 7 years if you go with the 2.1% rate (but you will have the security of an extra 3 years at that fixed rate).
Good point & definitely a plus for AIB customers compared to Avant's 2% breakage fee (which iirc would, based on my current balance, be twice the max UB breakage fee which is capped at 6 months interest) but I guess the risk here is that AIB could change their method of breakage calculation at any time in the future?But a (potentially big) point in AIB's favour is the way in which they calculate their break fee – it's laid out in this thread and this thread, but basically there is a decent chance that if they offer a lower rate in the future you could switch to that rate without incurring a break fee. And for the same reason there is also a decent chance that you will be able to make an overpayment (of any size) without incurring a break fee.
I misunderstood this part of your post from Monday. What I was saying is that a €15k overpayment would reduce your Ulster Bank monthly repayment to about €1,261. You were saying that the same overpayment followed by switching to Avant's 1.95% rate would reduce your Avant monthly repayment to about €1,216. Both calculations are correct.I just rechecked on Karl's Mortgage Calculator & a mortgage of €280k (IE a UB overpayment of €15k from €295k) at 1.95% over 24 years would give a €1218 monthly . How did you calculate €1261?
This was a comparison over 7 years of Avant's 1.95% rate versus Avant's 2.1% rate – AIB and cashback doesn't come into the comparison. I simply estimated the difference in interest paid under the two rates. That's 0.15% of €280k over 7 years, or €280k * 0.15/100 * 7 = €2,940, but reduce that a bit because the balance (and the interest paid) will be reducing with time. Hence the €2,650 saving over 7 years if you go for the 1.95% rate instead of Avant's 2.1% rate.Would you mind sharing the calculation behind the €2650 figure?
They could but the changed terms would only apply to customers who take out an AIB mortgage after that change. The use of the two calculation methods (and choosing the one that is more favourable to you) would be written into your mortgage contract if you switch now or soon, and they couldn't take that away from you. (At least, it appears to me to be part of the mortgage contract. I'd be interested to know if others agree or disagree.)I guess the risk here is that AIB could change their method of breakage calculation at any time in the future?
You can see from my first calculation (from yesterday) that AIB are competitive with Avant for your particular case over a 5-year time horizon. That's because of the AIB cashback, you are eligible for their green mortgage, you have a low LTV and your balance isn't huge.Related, unless Avant leave the Irish market I imagine most people would expect Avant to remain more competitive on rates alone than AIB if not the most competitive in the market, as they currently are, right?
In this post, @letitroll says that Avant might not be in Ireland for the long term. Of course, nobody knows for sure but it's interesting.Related, unless Avant leave the Irish market I imagine most people would expect Avant to remain more competitive on rates alone than AIB if not the most competitive in the market, as they currently are, right?
Your observation is correct, but it assumes that interest rates go up. It's possible that the current higher inflation is temporary and will subside, keeping rates low. Again, who knows?Further it seems in the short term that if rates move that they would more likely go up rather than down. As such the likelihood of having an opportunity to break & move to a lower AIB rate is lessoned, in the short term.
I don't know much about ICS but this post by @pguyo says he confirmed with ICS that their 1.95% rate is not available to existing customers. This suggests that they discriminate against existing customers (like PTSB), which could mean that you would have to switch away from them again in a few years to maintain a low rate.As for ICS, are there any other benefits to ICS over Avant other than the 20% Vs 10% overpayment facility? For example have ICS customers had the same level of difficulty corresponding with the ICS as Avant customers have?
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