Fee for going from Variable to Fixed?

[divadsnilloc]

Currently have a fixed with First Active expiring in November. Enquired this evening about options and apparently if I revert to Variable (which will happen automatically) there are no fees involved. However, if I hedge my bets and go on variable for a couple of months, I will be charged a fee of €125 if I want to revert to a fixed mortgage in the future. Is this normal practice? Ironically, if I decide to remain on a fixed when my term expires, I won't have the option of making a lump sum payment to reduce the amount outstanding. If I go on variable, I can do this, but then get hit for a fee of €125 if I go back fixed!!

Good to see that the Banks/Societies have changed their behaviour after being bailed out for €440 Billion!!

 

[ClubMan]

Is this normal practice?

Not sure if it's common/normal but I presume that each lender is free to levy charges like this if they see fit.

Ironically, if I decide to remain on a fixed when my term expires, I won't have the option of making a lump sum payment to reduce the amount outstanding.

Are you sure? I would imagine that you could. But you might face fixed rate breakage penalties.

If I go on variable, I can do this, but then get hit for a fee of €125 if I go back fixed!!

Do you really need to fix at all? Fixing in an attempt to time the market and save over a competitive tracker/variable rate is a mug's game. If you can afford your repayments and would not be too pressurised if rates increased by a few percent then consider sticking with a competitive tracker rate. In the long run it will most likely be the most cost effective. Fix if cashflow issues force you to.