Haven cashback and switching- Opinions

@MsCutha It's hard to see how they arrived at a break fee that is so high.

• What date is on that letter?
• Are you sure you fixed in July 2018? Could it have been June? Do you have your old mortgage statements to find the exact start date?

@Paul F i just checked again and I fixed in Aug 2018.

MsCutha said:

@Paul F i just checked again and I fixed in Aug 2018.

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Yes, that would explain the higher break fee.

It's impossible for anyone on this forum to provide anything other than an estimated break fee because we don't know the exact interest rates the lenders use in their calculation, but I have no reason to doubt the correctness of the figure they have quoted you.

The pros of waiting are that your break fee may fall in the short to medium term (but it could also rise).

The cons of waiting are that Haven's or EBS's interest mortgage rates may rise.

A rise of 0.2% would cost you an extra €500 per year in interest, approximately.

I have no idea what interest rates are going to do but higher inflation tends to bring higher interest rates, and I personally like the idea of locking in a low mortgage interest rate. But ultimately it's your decision as to when to switch.

@Paul F thanks so much for your help. I’ll think I’ll wait it out and will annoy them by requesting a break fee quote every month
The offer from Haven is available until Dec 2022 so hoping the fee shouldn’t rise by this autumn.

MsCutha said:

@Paul F thanks so much for your help. I’ll think I’ll wait it out and will annoy them by requesting a break fee quote every month
The offer from Haven is available until Dec 2022 so hoping the fee shouldn’t rise by this autumn.

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You understand that the Haven products (2.35% fixed for three years, and the 2% green mortgage) could have their interest rates increased at any time, right? (I'm not saying they will but they could.) Haven aren't obliged to keep offering those rates.

Even a small increase in their rates would more than wipe out any savings from a reduced break fee (because you'll have to pay that higher interest rate every year after you fix, not just this year).

Paul F said:

You understand that the Haven products (2.35% fixed for three years, and the 2% green mortgage) could have their interest rates increased at any time, right? Haven aren't obliged to keep offering those rates.

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I understand that, I’m just a bit reluctant to pay that much now to break. I’ll keep a close eye on the fixed rates and will make sure to request a break fee on a regular basis.

MsCutha said:

I understand that, I’m just a bit reluctant to pay that much now to break. I’ll keep a close eye on the fixed rates and will make sure to request a break fee on a regular basis.

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The thing is, by staying on the 2.9% rate, you are paying an extra €262000*(2.9-2.0)/100 = €2,358 in interest per year (versus a 2.0% rate). Over the next 6 months, it's an extra €1,179 in interest (or €720 if you "only" manage to get the 2.35% rate).

Staying on the 2.9% rate in the hope of a fall in the break fee seems like a false economy when there is a guaranteed saving available right now. Ultimately though, it's your call.

Hi @Paul F want to give a quick upI called UB on Monday to request another break fee. Letter came today and fee is €649! I cannot believe it. The offer is valid until 30/03/22. This lower fee gives me a lot of options as it means I can either switch to Haven 2% Green rate (A3 Ber house) for 4 years or I can switch to avant 2.05% for 5 years.
If I pay the break fee and my switch is not complete, will UB move me to their variable rate?

MsCutha said:

Hi @Paul F want to give a quick upI called UB on Monday to request another break fee. Letter came today and fee is €649! I cannot believe it. The offer is valid until 30/03/22. This lower fee gives me a lot of options as it means I can either switch to Haven 2% Green rate (A3 Ber house) for 4 years or I can switch to avant 2.05% for 5 years.

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The Haven 4-year green rate (2.0% with €2,000 cashback) looks to be a very good choice for that timeframe.

If you're prepared to settle for smaller savings in exchange for a longer fixed rate, consider Avant's 2.05% rate, fixed for 7 years.

You are probably too late to be eligible for the €1,500 cashback from Avant. To be eligible, the switch to Avant has to be underway before the end of March and you must use a broker who is an Avant "Gold Partner". I don't know what "underway" means but if you are inclined to try to beat the deadline you could talk to an Avant Gold Partner as soon as possible and see if it can be done.

If you're feeling brave, you could consider the strategy outlined in this thread: switch to Haven's 2.35% 3-year fixed rate and get the €5k cashback. Then quickly switch to Haven's 2.0% green rate. Nobody knows for sure if Haven will allow you to do this, so you might be stuck on the 2.35% rate, but at least you'd have got the €5k cashback.

If I pay the break fee and my switch is not complete, will UB move me to their variable rate?

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Yes. But make sure they put you on the 3.2% variable rate and not anything higher.

Thanks @Paul F. I noticed BOI reduced their green rate to 1.9% which I thought was great, but when I roughly calculated their interest rates with haven’s 2% and 2.35% . With cash back the difference in interest is around €262 a year higher than BOI for the 2% rate. Also it looks like BOI follow on rates are higher, maybe best to steer clear of them.
I doubt Haven will allow the switch from 2.35 to 2%. It will cost them a lot.

@MsCutha Yes, Bank of Ireland are not offering cashback on their high-value or green mortgages. That's fine, but the big problem is that those rates are only available to new customers. If you went with them, in four years' time you would only be eligible for their "normal" (higher) rates.