Calculating Breakage Costs UB

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MsCutha

Registered User
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Hi everyone, just wondering if someone can help give me a rough estimate of my breakage cost while I am waiting for an official breakdown.

Mortgage Outstanding = €271820
Repayment Amt = €1130/pm (increased to €1500)
Interest rate (Fixed 5 years) = 2.9%
Year mortgage taken out = Nov 2018
5 year term end = Oct 2023
LTV = 80%
Gradually increased monthly repayment from €1130 to €1500 as UB allows up to 10% repayment increase.

UB charges a breakage fee of 6 months or 2,500 whichever is lesser amount. Using the details I found on one of the threads, I calculated that moving from 2.9% to 2.2% interest rate with UB will save us approx €158 repayments per month (which we can hopefully put on top of the repayment). If the breakage costs is €2500 is this worth it? I will be looking to fix for another 5 years and UB seem to have the best rates in the market although they don’t offer cash back incentives apart from €1500 legal fees. Also are the cash back incentives worth it if you end up paying a higher interest rate? Thanks in advance.
 

Case Study: Internal Mortgage Switch UB

just need to convince himself that would be a good use of savings! Start by saying you want to move back to AIB! :) Break fee will stay zero for you unless interbank rates drop a bit. I'd be happy to have a look at numbers / savings for you if you drop me a PM.
www.askaboutmoney.com

Discussed here.
 
I assumed I would get charged 6 months interest or €2500 whichever is less. I could be wrong as I don’t know much about this.
 
Taken from the calculations in the attached letter.
 

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Ah, the 2,500 is just from that example, where the 2,500 is 6 months interest (i.e. it is the lesser amount).

I was pretty sure I'd looked at similar before: https://www.askaboutmoney.com/threa...tes-breakage-costs.204427/page-3#post-1675506

Are you absolutely sure your fixed term ends in Oct 2023? It'd be unusual for UB to be exactly 5 years - they are usually fixed until a specific date.

In your case, the 6 month cap would kick in, as market interest rates have dropped significantly since you fixed. That'd be approx 3,900
But, by reducing the interest rate to 2.2%, you'd save c. 5,300 interest over the remaining term. So you'd save money by breaking & refixing
 
Thanks for your reply. My loan term states from 11/08/2018 -11/09/2023 with the higher rates kicking in from 11/10/2023.
 
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