paying off mortgage - fixed rate - aib

Hi,
I've just found out that I will be made redundant. We have a mortgage with AIB, with around 150K outstanding. The rate is fixed at 3.45% until 2013. However, with redundancy payment and savings we would be in a position to pay this off. I'm just wondering has anyone had any experience with paying off a mortgage under a fixed rate, and not paying a penalty?
I'm of the opinion that the banks should be glad to get the money now, as opposed to 3 years from now (when I may have spent it!) and basically, I just want to pay off the balance?

Is this very naive?

Thanks in advance for your replies!

You can but ask but, if you are willing and able to pay the whole lot, I don't really understand why you would expect the Bank to do a deal. Or why they would do a deal with you. You sound like a perfectly sound long term risk!


mf

The three year fixed rate at AIB is currently 3.89% i.e higher than the rate you are currently paying so they may let you pay it off without penalty as they can basically then relend it at a higher rate. Give them a call and let us know. Some lenders would not charge a penalty fee for someone in your case but I think AIB might charge a penalty regardless of the rate you are on.

Hi Sinbad

Check the terms of your mortgage.

If you are entitled to a cheap tracker when the fixed rate period is over, then you might consider hanging on to it instead of paying it off.

See: Should I use a lump-sum to pay off my mortgage?

Given that you are being made redundant, you might want to keep the savings available in case it takes some time to get another job.

Even if you do want to pay off the mortgage, if you have the right to move to a tracker on termination of the fixed rate, then you should be asking for a discount for paying the mortgage off early instead of asking for a penalty to be waived. To quote MF "You can but ask..."

Brendan

Thanks for all the replies, I will but ask!