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

[Brendan Burgess]

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.

Extortionate Change in Break Fee

We were originally told our break fee with KBC was €0 so we pressed ahead with a new mortgage application (which just so happened to still be with KBC) so that we could move house. When the conveyancing process was finalised and we finally moved into our new home, we were told by KBC that our...

askaboutmoney.com

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

Brendan

 

[renter45]

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.

Extortionate Change in Break Fee

We were originally told our break fee with KBC was €0 so we pressed ahead with a new mortgage application (which just so happened to still be with KBC) so that we could move house. When the conveyancing process was finalised and we finally moved into our new home, we were told by KBC that our...

askaboutmoney.com

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?

 

[Brendan Burgess]

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

 

[renter45]

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.