I don't think it's the right benchmark. AFAIK they use something very close to EURIBOR. The 3 month rate was around 1.25% the last time I checked.The Net Interest Income Note on page 8 that their average cost of funding group-wide is close to slightly below zero.
Not necessarily. It depends on whether the reference rate when you seek to break is above or below what it was when you seek to break. You can request a quote from them to break and re-fix as often as you like.So, I infer from above (if indeed correct) that if one breaks from a Bank of Ireland fixed rate in 2023-2025, there should be no break fee?
They are obliged (per Ombudsman ruling, and on request) to send the relevant R number used when they make the quote and when you request a breakage.Boi never send the correct R figures they send some generic stuff.
Whenver I've requested it BoI sent me a worked example with a R% used on date of fixing and an up-to-date R1%. I've done this five or six times. Once they made a total mess of the calculations but fixed it on request.These figures of course were not accurate either today or 6 months ago.
To be frank I think you just don't understand what they've sent you.They sent me some mumbo jumbo generic quote
In fairness, I'd say lomber understands break fees very well and Bank of Ireland just sent him a generic worked example like this one.To be frank I think you just don't understand what they've sent you.
Hi Paul, I believe that banks here use the prevailing, EUR swap rate with equivalent fixed rate, on the day of drawdown vs. the current swap rate that most closely represents the number of years remaining in the fixed rate period. i.e. if you drew down your 5 year fixed rate mortgage in May 2019, the 5-yr swap rate on that day is the starting reference point, R. In this example, a borrower would be c. 3.5 years through their 5-yr fixed rate period, so the bank would take today's 1-year swap rate as R1.In fairness, I'd say lomber understands break fees very well and Bank of Ireland just sent him a generic worked example like this one.
I never managed to get Ulster Bank to send me the actual values they used for R and R1 either.
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