Key Post It may be much cheaper than you think to break out of a fixed rate early...

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Hi kingvagabond, did you ask Avant if you could change to a 7 year or 15 year mortgage? I’m in a similar position with them, I fixed for 5 but would like to fix for longer.
 
Just an update here. 15 year fixed rates are now off the table. They have a new product called 'One Mortgage'. It's calculated on the term of the mortgage instead of the rates. To fix for 15 years would mean the term of the mortgage would have to come down from its current 25 years to 15 years making the repayments more expensive. Should I break out and go elsewhere? I'm not sure what my options are?
 
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kingvagabond said:
Just an update here. 15 year fixed rates are now off the table. They have a new product called 'One Mortgage'. It's calculated on the term of the mortgage instead of the rates. To fix for 15 years would mean the term of the mortgage would have to come down from its current 25 years to 15 years making the repayments more expensive. Should I break out and go elsewhere? I'm not sure what my options are?
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Would you not just go with the 25 year fixed option then?
 
Does anyone know if you are switching from a fixed term mortgage to a different fixed term mortgage with the same bank do you have to get solicitors involved and get another survey done or is it just a matter of paying a breakage fee if there is one and then moving straight on to the new mortage with them?
 
Mortgages said:
Does anyone know if you are switching from a fixed term mortgage to a different fixed term mortgage with the same bank do you have to get solicitors involved and get another survey done or is it just a matter of paying a breakage fee if there is one and then moving straight on to the new mortage with them?
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I just did it last week with aib, no solicitor needed.
We wanted to pay off 10 grand of the principal, so we asked for a breakage fee.
they sent us a letter with the fee (0€) and a form with the rates available, and as long as you don't change your LTV then there is nothing else to do but send back the form.
 
Fibo49 said:
I just did it last week with aib, no solicitor needed.
We wanted to pay off 10 grand of the principal, so we asked for a breakage fee.
they sent us a letter with the fee (0€) and a form with the rates available, and as long as you don't change your LTV then there is nothing else to do but send back the form.
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Ah great, thanks for the info, hopefully its the same with Avant
 
Mortgages said:
Does anyone know if you are switching from a fixed term mortgage to a different fixed term mortgage with the same bank do you have to get solicitors involved and get another survey done or is it just a matter of paying a breakage fee if there is one and then moving straight on to the new mortage with them?
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Depending on what mortgage product you're moving to with the same bank, they might ask you to have a valuation done (is about €150) but definitely no solicitor.
 
was looking to switch to Avant but based on the above, I'm going to switch to AIB instead and their green 2.15% fixed rate. Repayments are a little higher each month, but there's 2,000 euro cashback for switchers and I know there won't be the hassle with AIB like you have with Avant. Your experience will only put people off even considering them for switching.
 
Hi
I am looking for views/guesses on the likelihood of Avant raising their 1.95% mortgage rates for five or seven years (ICS same for 5 years) within the next six months.
Avant launched their 5-year rate of 1.95% in Sept 2020, when the 5-year rate (on theice.com) was around -0.420%. If they had planned the product say 3 months earlier, the rate would have been around -0.312%. I know these are not the rates individual banks borrow at, but I would expect the underlying trend to be the same.
Interest rates appear to rising for that period (per theICE.com/market data, but I assume similarly elsewhere). The five-year rate is now +0.042%. So the movement since the launch is nearly 0.5%.

I have two years left on a KBC five-year fixed mortgage (at 2.6%) – LTV less than 60%. As interest rates also increase for the shorter term (eg two-year) the break fee will decrease (and it will also decrease as the remaining term shortens): so waiting to switch minimises the cost of switching.
So I am guessing that there is likely to be a sweet spot, just before Avant announce they are increasing rates (get the best rate) and minimise the cost of switching.
I realise that other (business) factors are at play, not just interbank rates: Avant/ICS may expect an influx of customers when UB and KBC leave, so could grab additional business by keeping rates lower or lock in additional profit by raising rates sooner.
I hope the above makes some sense (to someone/anyone?). I don’t think I am overlapping with other threads: apologies if I have.
Thanks - r
 
If people here could guess when Avant or any lender will increase or decrease their rates, they would be very wealthy indeed.
 
@mornington It took me ages to switch my mortgage (not to Avant but to another lender), and there are posts in this thread about Avant being very slow to respond as well. Switching is rarely perfectly plain sailing or super fast, so be very careful about trying to time a switch precisely.

What month and year did you fix with KBC? What is your balance outstanding and your monthly repayment? What is your BER?
 
Thanks Paul F
I switched to KBC in Nov 2018, bal about 200k, and monthly repay is 1,200 (17 years left).
I got a break fee over the summer of €4,200, which I expect has fallen to around €2,800 now (my estimate). The option (security) of 7 years at 1.95% is very attractive to me, but by switching now, for two years I pay €200 per month (break fee) to save €100 (in interest) .
Solicitor fees to switch will be incurred sooner or later.

My overall point is that I expect rates will start increasing: I wasn't expecting a reply with an exact answer, I posted because I was wondering if I had failed to consider anything. My BER wouldn't be good enough for the cheaper AIB loans (it is C-something, from memory).
I hear what you say about the time it takes to switch, so I think I will start getting the wheels rolling on it - in the longer term, it is a better option and the break fee will have fallen (probably!) by the time I am ready to switch. Thanks for your help.
 
@mornington By my calculations, your break fee should be about €2,400 now. No harm in requesting it from KBC again.

Is there any realistic chance of getting your BER up to B3? You would be a few hundred ahead in 5 years by getting AIB's 2.1% green mortgage (which has €2,000 cashback) versus Avant's 1.95% 5- or 7-year fixed rate. But your house upgrades plus your new BER cert would need to cost less than that.

If not, Avant is the best choice. As you know, everything else being equal, for every month that passes your KBC break fee falls by €200 but you are paying about €110 more in interest (than you would with Avant). And your main fees for switching will be solicitor + valuation (perhaps €1300 + €185).

I won't hazard a guess as to when/if Avant will change their rates.
 
Update: I received the letter a couple of weeks ago and have sent it off in the post. I ticked for the ONE mortgage. Fingers crossed that it's done and dusted.
 
Could someone advise the likely break fee for a PTSB 2Yr Fixed Rate of 3.10% on €277k if I break after 12 months?
 
Can someone please calculate my break Fee.
PTSB.
3Yr Fixed
Exactly 1 yr into 3 yr fixed
Rate 2.95%
Outstanding balance 279K


Thanks..
 
Oh wow that is great. Thanks Red Onion. Cant believe it might be Zero.

Any idea (Ball park) on how much it would cost to switch the mortgage.
 
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