Key Post If you get quoted a low or zero break fee, take it quickly

Brendan Burgess

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If you are thinking of switching product, switching lenders or paying down your mortgage and get quoted a low break fee, then grab it immediately, even if you have not decided which product or lender you are switching to.

This user, Jimbodean, was quoted a nil break fee by KBC, based on which he sold his house. When he went to redeem his mortgage, the break fee on a €141k mortgage had risen to €17,000.


He could have saved himself this money by availing of the break fee as soon as it was quoted.

Brendan
 
If you are thinking of switching product, switching lenders or paying down your mortgage and get quoted a low break fee, then grab it immediately, even if you have not decided which product or lender you are switching to.

This user, Jimbodean, was quoted a nil break fee by KBC, based on which he sold his house. When he went to redeem his mortgage, the break fee on a €141k mortgage had risen to €17,000.


He could have saved himself this money by availing of the break fee as soon as it was quoted.

Brendan
How? switching to a variable rate for zero break fee, then paying higher variable repayments whilst going through the buying and selling process?
 
then paying higher variable repayments whilst going through the buying and selling process?

Hi renter

I had assumed that these would be relatively small, but you are right that one should check them first.

In the case I used as an example, he had a mortgage of €140,000

If the variable rate was 1% higher than fixed rate, the additional interest would be €1,400 a year.

If switching lender would take 6 months, that would be a cost of €700.

He ended up paying €17,000 of a break fee.

Brendan
 
Hi renter

I had assumed that these would be relatively small, but you are right that one should check them first.

In the case I used as an example, he had a mortgage of €140,000

If the variable rate was 1% higher than fixed rate, the additional interest would be €1,400 a year.

If switching lender would take 6 months, that would be a cost of €700.

He ended up paying €17,000 of a break fee.

Brendan

Hopefully more people read this website and go into switching, buying trading up etc.... armed with a bit more information.
 
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