Charged to move rates, € 2000 !!!

This will make you laugh or cry in my case, below is a rough letter i am sending to my bank. Was interested to know other thoughts. With the bank of Ireland, i have not contacted the branch as yet.

I switched my mortgage in February, through your branch which my account is held to a fixed rate. I did this as a money saving plan with interest rates on the rise.

I was horrified on getting my yearly statement to see i had been charged a fee of €1950 or 4.250% of my mortgage to do this.

I have since discovered I was already in a 3 year fixed rate product which is due to expire this coming october. I was not aware that was still in a fixed rate. Which was very amiss of me, however at no point was it pointed out to me I would be getting this fee. I feel very strongly the bank have a duty of care to point this out to me.

Part of the reason I was not aware is that the bank have always sent me letters when ever there has been a change of interest rates telling me what would happen to my payments up or down. Looking back at the statements it is very clear that the amount i was paying was fixed.

What the best I can hope for here?. Yes i know i was dumb not to have all the facts and should have know. Part of the problem it as all done by phone as i do not live close to the branch.

I think they should at very least restate my old plan and drop the fees. But I am not sure if I have a leg to stand on. As a side note i run my bussiness though this brach spending around € 3000 in fees. Which I will pull as much of it as I can should I not get something back.

Is you fixed in October 07 then the rate would probably be quite high, around 5%. You then requested them to change to a new fixed rate which I presume is lower so they charged you the breakout fee. The figure seems excessive however given that you say that 2k is roughly 4% of your mortgage which you means your mortgage is 50k. Is that right ? I suggest you remove/edit the original post to give the facts in case someone from BOI lurks here. Just summarize what happened. Let them respond and see what they say.

PS Let me know if you want me to delete this thread and maybe start another instead.

Hi Elcato

If you feel the need to delete this thread, I can do it again. But I am not sure why ?. I but the name of the bank as I thought it maybe helpful. I know there are high break out fees on fixed rate mortgages. I am ok with that.
I did not know i was in a fixed rate mortgage.
If i had i would not have moved and would have waited till october.

I have two points.

1) I was dumb
2) The bank should have point out I would get a huge fee. Which was a big shock. I feel they should have let me know i was making a silly mistake

What would you do ?

my rate was 5.3 % and it dropped to 4.25 on 88000. Opps make that 90 now !!

I would do exactly as you say and write a letter outlining the points and asking for some kind of compromise. But I'm not sure you will get any. Work out the figures and see what the real difference is. Take your latest repayment and deduct it from your repayments till Jan 10. Multiply by 9 and that is what you have saved by the move. Then deduct that from €1950. That will give you your net loss. However, the fixed rate in Oct 10 will be higher than the one now by .5% so you are saving that hit for that time and assume also that it wont rise any further before then. I think you probably have not come out as bad as you may think (of course rates may come down in the next while also but you could be a lot worse off).

How. could. you. not. know. you . were. on. a. fixed. rate?

This is not rocket science. Personal responsiblity is important here. The Bank is not your parent or guardian. You did not know your own situation. The Bank have no obligation to tell you.

By all means try and reverse the situation. Its always worth a shot.

But, really, why would the Bank have any obligation to you here?

mf

switchfee said:

Part of the problem it as all done by phone as i do not live close to the branch.

Click to expand...

Are you sure there was nothing signed?

I'm surprised you didn't have to give some sort of written authority, usually breakage costs would be set out in the accompanying letter.

Hi
Thanks for your time.

mf1. I do see where your coming from there!. It a busy account and the bank were telling me of changes in my payments when rates moved. ( i do not have copy"s of these)

I thought banks did have to point out fees by law ??

The bank will make more money out of me if they take care of me. Is it not a good moral and business too let me know that there was a large fee for my action.

elcato. i understand that as long as rate rise the amount i will lose will not be the full amount. But I am far from saving money here

NorfBank said:

Are you sure there was nothing signed?

I'm surprised you didn't have to give some sort of written authority, usually breakage costs would be set out in the accompanying letter.

Click to expand...

I did have to sign a form which was sent out in the post. No fees set out at anytime, had there been i would not be in this mess !

I have really to echo the others and say - how could you not know your rate, or even what the expiry is of the fixed - unless you have a dozen different mortgages to reconcile.... and even then you should have the details in a password-protected spreadsheet.

Do you have e-banking? does it tell you the rate on your mortgage account etc?

I think if I was you I'd just accept it, that by default you have actually done the right thing, you have put on a fixed rate at quite low rates, before BoI increased them by 0.50%, and probably more by October as Irish banks have signalled that they will be increasing rates further. In my view, if you can fix at a reasonable rate sub 4.00% for 3 year, or sub 4.5% in 5 year then go for it - rates will only be going one way for the next 2 years... UP!

So you were charged approximately 2% (not 4%) to break your existing deal. You have saved, by virtue of the rate differential, 1%. So you've been charged 1 - 1.5% to fix, when rates are certainly lower than they would have been at the end of your fixed term.

This is not a bad deal, and certainly no rip off.

If you've been charged without notification then fair enough, but in fairness you've not shown any knowledge of your own finances - there's every possibility you were notified but just ignored the details.

I know what I'd do as the bank manager - roll back all payments, withdraw the fixed rate offer and allow your existing rate run it's course. Then stick you on the Variable rate as per your terms and conditions.