Key Post Switch or re-fix my mortgage? Breakage fee calculator and savings estimates for your case (Ireland)

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Paul F

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I am creating this thread as a place where people can request guidance on whether they should switch their mortgage to another lender (also called mortgage refinancing or remortgaging) and, if so, which lenders and interest rates they might consider switching to.

You are allowed to switch even if you are in the middle of a fixed rate with your current lender. The savings can be very significant, even if you have to pay fees. (The typical cost for switching mortgage provider is €1,500, but the savings you make will quickly cover this in many cases.)

The guidance you receive will include an estimated calculation of the breakage fee ("early repayment charge" / "breakage cost") if you are currently on a fixed-rate mortgage, and the savings you would make by switching. (There are no breakage fees on variable-rate mortgages.) I am not aware of an online mortgage break fee calculator for Ireland, but this is arguably the next best thing.

To request guidance, please provide the following information:
  • Current lender
  • If your current lender is Permanent TSB, was your mortgage transferred to them from Ulster Bank?
  • Outstanding mortgage balance (how much you still owe)
  • Approximate current value of your property
  • The date you started your fixed-rate mortgage (month and year)
  • How many years you fixed for
  • Your current mortgage interest rate
  • Your current monthly repayment (excluding any overpayments)
  • Your property's BER (Building Energy Rating) – check it here or estimate it if necessary
  • Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when?
  • Did you use a broker when you took out your current mortgage?
If you are looking for information on something that is not directly related to break fees or which lender to switch to, first check the below links to see if your query has been answered before. Consider asking your question in one of those threads before asking it here.

Most mortgage lenders in Ireland – AIB, Avant Money, Bank of Ireland, EBS, Finance Ireland, Haven Mortgages, ICS Mortgages, Permanent TSB – allow you to switch your mortgage to them. Ulster Bank still allow their current mortgage customers to switch to a different interest rate ("re-fix").

Interest rates could rise between now and the time that you complete any switch, so you (or your broker) should apply simultaneously to two or more lenders for approval in principle (AIP), or consider re-fixing with your current lender (which is a much simpler and quicker process).

If you have a tracker mortgage and you are trying to decide whether or not to fix your mortgage (or switch lender), see the tracker thread. (You can come back here and post your mortgage details if you decide to fix/switch.)

If you have a buy-to-let (BTL) mortgage, or you are renting out your property, start a new thread with your questions.

Nothing in this thread should be considered financial advice.
 
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Reasons why you may not be able to switch your mortgage

Review the below list to see if there are any reasons why you might not be able to switch to another lender at the moment.

But also ask yourself if any of the following reasons might apply to you in a few years' time. If you switch now to a lender with a generous cashback offer or a low introductory rate, you might find yourself "stuck" with that lender's high rates in the future because you are unable to switch again. See this post for information about the various lenders.
  • You (or your partner, in the case of a joint mortgage) are on probation in a new job
    • But you should still start the switch as soon as possible, since the process usually takes between two and four months
    • You will be able to get approval in principle (AIP) with some lenders even if you are on probation, but you won't be able to complete the switch until your probation is over
    • That being said, some lenders will let you complete the switch while you are still on probation. This seems to be the case when your loan-to-value and loan-to-income ratios are low, or when your new employment is considered very secure.

  • Your (or your partner's) employment circumstances have changed significantly since you got your mortgage
    • E.g., a large reduction in salary, or one of the couple is looking after the kids and no longer working
    • Most lenders are unlikely to let you switch to them if your mortgage balance is greater than 3.5 times your combined annual income. E.g., if the balance left on your mortgage is €245k, your combined annual income usually needs to be at least €70k. (It is not the Central Bank that applies this rule – it is the lenders themselves.)
    • If you are self-employed, consider Bank of Ireland or Finance Ireland

  • You do not meet the new lender's affordability tests
    • This can occasionally happen even if your income has not reduced since you took out your current mortgage
    • For example, if you barely met the affordability tests when you took out your current mortgage, you might not meet the new lender's tests
    • Affordability tests are typically based around the monthly mortgage payment as a proportion of your monthly income, and sometimes how much money you would have left at the end of the month after all outgoings

  • Insufficient time with your current lender
    • Usually you need to have been with your current lender for at least 12 months before a new lender will take you
    • But different lenders have different rules (further info here)

  • Your mortgage is in arrears

  • You have a bad credit record
  • You have a mortgage with a "warehoused" portion on which you are not paying any interest
    • However, if 5 years have passed since you were last in arrears, you may still be able to switch even if part of your mortgage is warehoused

  • There are serious defects in your property (mica, etc.) that have emerged since you first took out your mortgage
    • Some types of defects are not a problem for switching

  • There are problems with the title of your property
    • For example, you/a previous owner built an extension that required planning permission but you/they did not get planning permission
      • If you are lucky, you will simply need to get a certificate of compliance or a declaration of exemption
    • Note that just because your current lender overlooked a problem like this with the title, that does not mean that another lender will
    • It is also possible that your previous solicitor missed an issue like this with the title but it gets discovered by your new solicitor during the switching process

  • Your mortgage balance is too low
    • Most lenders will only let you switch to them if your mortgage is at least €30k to €40k
    • Avant will only let you switch to them if your mortgage is at least €100k
    • ICS will only let you switch to them if your mortgage is at least €150k
    • Note: if a particular broker tells you that your mortgage balance must be, e.g., at least €200k in order to switch, look for another broker. (The broker is imposing more conditions than the lender.)

  • You and your partner have a joint mortgage and have split up and your partner won't agree to a mortgage switch

  • Your loan-to-value ratio (LTV) is over 90%
    • As an example, if your current mortgage balance is €276k and your property is worth €300k, your LTV is 276/300 = 92%
    • Some lenders (Avant Money, Finance Ireland and ICS) are stricter than this and will not let you switch to them if your LTV is over 80%
    • If you are in negative equity, your LTV is over 100% (your property is worth less than your mortgage) and you won't be able to switch

  • The break fee is very high
    • The break fee is also called the breakage fee, early repayment charge, ERC, break funding fee, break funding cost, break charge, early breakage charge, breakage cost, early redemption charge, etc.
    • You may have to pay this charge if you are breaking out of your current fixed-rate mortgage before the fixed-rate period expires, but the charge is often very low or zero (especially for people who took out a fixed rate before spring 2022)
    • Even if the charge seems high, the savings from switching can often be much larger
    • You can use this thread to request a calculation of the early breakage charge and the savings you would make (both estimated)

  • You do not have enough savings to cover the upfront costs of switching (approximately €1,500)
    • Even though switching usually saves you money over the medium and long term, you need to pay some fees upfront
    • You should be able to find a solicitor who charges €1,300 or less, including VAT and outlays (see below)
    • The valuation fee is €150 or €185. Note that some brokers will pay this fee for you if you are switching to Avant.
    • You can ask for an estimate of your break fee in this thread. It is often lower than people imagine (especially for those who took out a fixed rate before spring 2022).

  • There are only a few years left on your mortgage
    • Most lenders will probably only let you switch to them if there are at least 5 years remaining on your mortgage
    • And even if a lender will let you switch to them, you might be better off re-fixing with your current lender (which is much simpler and quicker to do)

  • Your property is older than 100 years
    • This is not a problem on its own but you will need a structural survey
    • If that survey shows certain types of problems, some lenders won't let you switch to them (see this case)

  • You have moved out of the property and are now renting it out
    • This means you would only be able to switch to a buy-to-let mortgage, which will have a higher interest rate

Some of the above reasons may not be a major problem for certain lenders. It is often worth talking to them or to a broker to see if you can still switch.

If you are definitely not able to switch to a different lender, you may be able to switch to a better rate (or fix for a longer period) with your current lender – and this is very simple and quick to do. Bear in mind that you can do this even if you are in the middle of a fixed rate. Feel free to ask for guidance in this thread (supplying your mortgage information in the format shown in the first post). In the case of some lenders, you may even be able to get a better rate than they advertise by threatening to switch.

Note that being on maternity leave does not seem to be a problem for switching.
  • _OkGo_'s comment: "the lender will just look for an additional letter from your employer confirming your return date and that there is no change to your position or salary"
  • Itchy's comment: "Just been through the process. There was no extra requirements other than they requested a letter from the employer to state that they would be returning to their position."
  • Note that Avant Money have told some people that they cannot draw down (complete the switch) until they have been back to work for one month and have received their monthly pay
Borrowers are sometimes reluctant to enter into a fixed-rate mortgage if they expect to move house in the next few years. But consider the following:
  • Fixed rates can be lower than variable rates, so the savings on a fixed rate will offset some or all of the break fee you may have to pay when you move
  • You can fix for a relatively short period, e.g., 2, 3 or 4 years, which will help limit the size of any potential break fee
    • E.g., if you expect to move in about three years' time, fix for 3 or 4 years
  • Break fees are often a lot lower than people imagine
  • Avant Money will waive or refund any break fee if you move home, provided you take out a new mortgage with them (subject to certain conditions)
  • Therefore, you should still consider switching (or re-fixing with your current lender) even if you expect to move house in the next few years, but either avoid a long fixed rate or pick a mortgage that allows you to avoid a break fee when you move
    • Re-fixing with your current lender is much simpler and quicker than switching to another lender, and avoids solicitors' fees
 
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Resources

Brokers who work with Avant Money
  • You can apply for Approval In Principle (AIP) via Avant's website
    • After that you can contact a broker (or you can contact a broker as the first step)
  • List of brokers on Avant's website
  • Confirm with the broker that you will not be charged a fee
    • Here is an old list of some brokers that don't charge a fee, but confirm with them yourself
  • Some Avant brokers will even pay the lender's valuation fee on your behalf
  • Be aware that Avant will not give mortgages for certain properties – for example, they seem to refuse to lend against one-off rural housing
Mortgage rates available
  • The "lowest mortgage rates" thread has straightforward tables of interest rates
  • The CCPC's comparison tool (the "Switchers" tab). A small number of rates are missing or incorrect. Incomplete info on cashback offers but overall a useful tool.
    • Even though Ulster Bank rates are no longer listed, existing mortgage customers of Ulster Bank should be aware that they can still change to a different Ulster Bank interest rate ("re-fix")
Re-fixing with current lender versus switching to another lender
  • Key Post: What happens if fixed rates rise before I have switched?
    • Usually you cannot "lock in" a given fixed interest rate while you are in the middle of the switching process. The lender has the right to change the rate right up to the point of drawdown.
    • However, if you have a full loan offer (and not just approval in principle) before the announcement of the rate increase, some lenders will let you have the old (lower) rate as long as you complete the switch within X weeks
    • Because interest rates could rise between now and the time that you complete any switch, you (or your broker) should apply simultaneously to two or more lenders for approval in principle (AIP), or consider re-fixing with your current lender (which is a much simpler and quicker process)
    • When do you have to decide which lender to go with?
  • Ulster Bank are leaving the Irish market, possibly by mid 2023, and their non-tracker mortgages will be sold to Permanent TSB. Even though you can still change to a different interest rate ("re-fix") if you are an existing Ulster Bank mortgage customer, you should realise that when your fixed rate ends you will be put on a PTSB interest rate, which could be much higher.
    • Therefore, it may not be a good idea to re-fix with Ulster Bank if you have the option to switch to another lender (or if you are unsure that you will be able to switch to another lender when your fixed rate with Ulster Bank ends)
    • That being said, it is very simple and quick to re-fix with Ulster Bank (allowing you to "lock in" today's rates for up to 7 years), whereas switching to another lender takes a few months, and rates could increase during that period
    • Also, it could be a perfectly good idea to re-fix with Ulster Bank if there will only be a few years remaining on your mortgage at the end of the new fixed rate
    • See here for information on how to contact Ulster Bank to request 1) a break fee quote and 2) a form to allow you to re-fix on a different rate (if that is what you decide to do)
      • You will receive two separate letters a few days apart, and their structure and wording can lead to confusion. Look for the line that says something like: "Based on today's information this would result in an early redemption charge of €X to no longer be bound by this fixed rate." That amount is your break fee. Ignore all other references to break fees/breakage costs.
  • If your mortgage is with Permanent TSB and you are considering re-fixing with them, call them and ask them to send you a list of fixed rates that you are eligible to switch to (and also ask them for a break fee quote)
    • The fixed rates in the letter are valid for 30 days, which will give you some time to decide whether to re-fix with PTSB or to switch to another lender
Mortgage overpayments
  • Some lenders allow you to make large overpayments on your fixed-rate mortgage without penalty – see this thread for details
    • Note that even if a lender does not allow overpayments without penalty, that penalty can sometimes be very small or even zero. You can provide your mortgage details in this thread (in the format shown in the first post) to get an estimate of the penalty.
    • Making an overpayment, no matter how large, will not result in you losing your fixed interest rate – i.e., you do not have to break out of your fixed rate to make an overpayment (but you may have to pay a penalty to make the overpayment)
    • But be aware that if you ask to shorten your mortgage term at the same time as making the overpayment, it is possible that you will lose your fixed rate – it depends on which lender you are with
    • You can always overpay on a variable-rate mortgage by as much as you want without penalty
  • Overpaying my mortgage - should I reduce the term or the monthly repayment?
    • It is almost always better to reduce the monthly payment and not the term
  • Typical financial priorities and where mortgage overpayments fit in
Mortgage calculators
Low-cost solicitors (these are not necessarily recommendations, just info from other posters)
  • A solicitor is not needed if you are switching to a different rate with your current lender (fixing/re-fixing)
    • This is very simple and quick to do
  • Look for an "all-in" quote (including VAT and outlays) of €1,300 or less
  • When talking to a potential solicitor, ask them if everything can be done by post and email. If so, you will not need to go to their office and you will be free to use a solicitor who does not live in your part of the country.
  • Cheapest solicitor for switching mortgages
  • Low-cost solicitors for remortgage
  • 1200 euro for switcher conveyancing - keep looking?
  • Before you hire a particular solicitor, confirm with them that they are prepared to give undertakings to the lender in relation to the transfer of your mortgage protection policy, etc.
BER (Building Energy Rating) certs and assessments
  • To switch to a "green mortgage", you must have a BER cert for your property with a rating of B3 or higher
  • The BER cert must be less than 10 years old
    • Some lenders may let you use your old BER cert if it is only slightly out of date
    • If you bought a newly constructed property, you may have a provisional BER cert, which is only valid for 2 years instead of the usual 10 years
  • Check if your property already has a BER cert by entering your MPRN (shown on your electricity bill)
    • Also check with your current lender and solicitor to see if they hold your BER cert
  • If you need a new BER cert (or if you have never had one), shop around for a low-cost BER assessor
  • There is no guarantee that you will get a B3 (or better) rating, so before arranging an assessment consider whether or not you are likely to get the rating you need
    • If you don't, you will arguably have wasted the money
    • If your neighbours' houses are very similar to yours, ask them if they know their BER. Or Google for old "For sale" listings if any of those houses sold in recent years and see what BER they claimed to have.
  • Key Post: Green mortgage rates
 
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Difficulties encountered during switching (and solutions)

Maternity leave
  • Being on maternity leave does not seem to be a problem for switching
  • _OkGo_'s comment: "the lender will just look for an additional letter from your employer confirming your return date and that there is no change to your position or salary"
  • Itchy's comment: "Just been through the process. There was no extra requirements other than they requested a letter from the employer to state that they would be returning to their position."
  • Note that Avant Money have told some people that they cannot draw down (complete the switch) until they have been back to work for one month and have received their monthly pay
Foreign credit checks
Qualification on title
Other
 
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Might as well get the ball rolling:

Current lender: Bank of Ireland
Outstanding mortgage balance: 342k
Approximate value of your property: 575k
The date you started your fixed-rate mortgage: December 2019
How many years you fixed for: 5
Your current mortgage interest rate: 2.8%
Your current monthly repayment: 1500 approx
Your property's BER: A3
Are you due to get extra cashback from your current lender in the future: 4300 in December 2024
 
@fungie20 Your break fee should be zero.

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, which isn't bad considering the €5k cashback.

There is a similar strategy with EBS (see @Brendan Burgess's third post in this thread), but it is higher risk in the sense that you will be stuck on a 2.9% rate if they don't allow the second switch.

Or you could settle for smaller savings over the short/medium term but a longer fixed rate by going for Avant's 1.95% 7-year rate.

It doesn't seem worth staying with BOI for another several years to get the €4,300 cashback.


Edit: here is a more comprehensive set of estimates:
  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €7,160 over the next 4 years

  • Switching immediately to ICS's 5-year fixed rate (1.95% with no cashback) will save you about €5,780 over the next 4 years

  • Switching immediately to Avant Money's 4-, 5- or 7-year fixed rate (1.95% with no cashback) will save you about €5,780 over the next 4 years – but with the longer security of up to 7 years on a fixed rate
    • If Avant won't let you switch to them and you really want to fix for 7 years for some reason, you could consider Haven's 7-year fixed rate (2.65% with €5,000 cashback)

  • Switching immediately to AIB's 5-year green fixed rate (2.15% with €2,000 cashback) will save you about €5,220 over the next 4 years
    • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)

  • Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will save you about €3,840 over the next 4 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.4% with no cashback) will leave you worse off by about €80 over the next 4 years – but with the longer security of 10 or 15 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

  • Switching immediately to Finance Ireland's 20-year fixed rate (2.5% with no cashback) will leave you worse off by about €1,380 over the next 4 years – but with the longer security of 20 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

  • Switching immediately to Finance Ireland's 25-year fixed rate (2.65% with no cashback) will leave you worse off by about €3,360 over the next 4 years – but with the longer security of 25 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

  • Switching immediately to Avant Money's "One Mortgage" (a 2.85% fixed rate with no cashback) will leave you worse off by about €5,980 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 27 years)

  • Switching immediately to Bank of Ireland's 5-year fixed rate (3.0% and you would get the 1% (€4,300) cashback) will leave you worse off by about €2,160 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to Bank of Ireland's 10-year fixed rate (3.3% and you would get the 1% (€4,300) cashback) will leave you worse off by about €6,280 over the next 4 years – but with the longer security of 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

These savings estimates use for comparison the scenario of switching to the 2.9% rate with Bank of Ireland when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 2.9% rate in December 2024 – it could be higher (or lower). You would get the Bank of Ireland €4,300 future cashback in such a scenario, and the savings estimates account for this. The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

You should call Bank of Ireland and tell them that you are planning to switch to another lender. Ask them what interest rates they will offer you to break and re-fix with them. Please post a summary of their response here.

All of Avant's rates, and Finance Ireland's 10-year and longer fixed rates, allow you to avoid any potential break fee if you move home in the future (as long as you take out a new mortgage with them, and subject to certain conditions). And in the case of Finance Ireland you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move (provided that at least 3 years have passed since you started the Finance Ireland fixed rate and subject to certain other conditions).

The estimates also assume that your loan-to-value ratio (LTV) really is below 60% so that you are eligible for the listed rates. Your LTV estimate is 342.0k/575.0k = 59.5%. If you get a valuation of less than €570k, you will need to make a few more monthly mortgage payments and/or a lump sum overpayment to get the LTV below 60%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.

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. If it works, you will be better off by about €10,160 in four years' time. 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.

Bear in mind that interest rates could rise between now and the time that you complete any switch, so if you are thinking of switching you should probably apply simultaneously to two or more lenders for approval in principle (AIP).
 
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Current lender: KBC
Outstanding mortgage balance: 192k
Approximate value of your property: 320k
The date you started your fixed-rate mortgage: 28 June 2019
How many years you fixed for: 5
Your current mortgage interest rate: 2.65%
Your current monthly repayment: €1,018
Your property's BER: N/A
Are you due to get extra cashback from your current lender in the future: No

I rang KBC on 15 Feb and was quoted €101 to break, then they rang me back and said they made a mistake and it was actually €501. I received the letter with the €501 break fee this week but it doesn't show the interest rates used in the calculation. I believe the interbank interest rates have dropped a bit since 15 Feb but does the €501 I was quoted then sound right? Thank you!

Edit: They just told me the original funding cost was -0.09 and the "cost of breakage" is -0.21.
 
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@Thrifty_Fifty That break fee does not look correct to me.

I'll assume that the cost of funding (-0.09%) is correct. But based on this graph, the cost of breakage should be around +0.21% (using the 13 Feb datapoint), not the -0.21% that they have quoted you.

If I'm right, the calculation is €192000*(-0.09 - (+0.21))/100*2.3 = -€1,325, i.e., a break fee of zero.

@Brendan Burgess or @_OkGo_ or anyone else who is familiar with break fees, what do you think?
 
Paul F said:
If I'm right, the calculation is €192000*(-0.09 - (+0.21))/100*2.3 = -€1,325, i.e., a break fee of zero.

@Brendan Burgess or @_OkGo_ or anyone else who is familiar with break fees, what do you think
Click to expand...
Sorry @Paul F , my knowledge of interbank rates (and where to find them) is lacking so I'm not much help.

But your calculations look correct and it would appear to be a typo by KBC using the wrong sign on the 0.21%
 
Many thanks for the help. I was surprised there was a break fee as I thought interbank rates might be higher now than when I fixed at the end of June 2019.

I suppose my next step is to ring and ask if it's possible they used the wrong sign in the calculation....
 
Thrifty_Fifty said:
I suppose my next step is to ring and ask if it's possible they used the wrong sign in the calculation....
Click to expand...
I think it's very unlikely that they would understand what you are talking about. It's probably best if you just ask them for a new break fee quote and hope that they do it right this time. (I'm assuming in all this that they made a mistake. I suppose it's possible that they didn't, but then again they gave you a wrong amount (€101) initially.)

As an aside, it sounds like they have a very manual process for calculating break fees, which is pretty shocking if true.

If your break fee comes back as zero or very small, you might want to consider breaking and switching to:
  • KBC's variable rate (3.0%), or
  • KBC's 2-year fixed rate (2.25%)
  • KBC's 2-year fixed rate (2.3%) if they tell you that you need an updated valuation to get the 2.25% rate
This switch is only a temporary measure if you want to "lock in" a low break fee. If the 2-year interbank rate continues to drop and gets below -0.09%, there will be a break fee. But maybe it will rise and there will continue to be no break fee – who knows.

Of course, switching to the 3.0% variable rate comes with a cost – an extra €56 per month in interest. The 2-year fixed rates would save you a similar amount in interest but would only delay any break fee if interbank rates continue to fall.

Anyway, all of that is just a stepping stone to leaving KBC. Your best bet is probably to switch to Avant's 1.95% rate, fixed for up to 7 years. And if you start the switch before the end of March, you'll get €1,500 cashback (provided you use a broker who is an Avant "Gold Partner").
 
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Hi Paul F,

This is a really useful thread, thank you.

- Ulster Bank
- €650,000
- €1.75m
- December 2017
- 5 years 3 months
- 2.5%
- €2,850
- C3
- No cashback due

Many thanks,

Gordon
 

I'm thinking of switching to Avant alright. I should be able to get lowest rate on offer and fixed for a good period of time.
 
Great thread, thanks in advance.

  • Current lender: BOI
  • Outstanding mortgage balance (how much you still owe): €210k
  • Approximate value of your property: €420k
  • The date you started your fixed-rate mortgage (month and year): April 2021
  • How many years you fixed for: 1
  • Your current mortgage interest rate: 2.9%
  • Your current monthly repayment (excluding any overpayments): €1,617
  • Your property's BER (Building Energy Rating) – estimated if necessary: A2
  • Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much and when?: No
House was a self-build
 
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Gordon Gekko said:
- Ulster Bank
- €650,000
- €1.75m
- December 2017
- 5 years 3 months
- 2.5%
- €2,850
- C3
- No cashback due
Click to expand...
Your break fee will be approximately €3,800, but confirm it with Ulster Bank.

Switching to Avant's 1.95% rate fixed for up to 7 years will save you about €7,700 over the next five years (versus switching immediately to Ulster Bank's 2.2.% 5-year fixed rate), and that's after accounting for fees and cashback. Of course, if you decide to stay with UB and switch to their 2.2% rate, you will probably have to switch again in a few years, at which point interest rates might be higher.

The above assumes that you start the switch to Avant before the end of March and use a broker who is an Avant "Gold Partner", so that you are eligible for the €1,500 cashback.

Your break fee (€3,800) and the amount of extra interest you would pay by staying on the 2.5% rate (€3,575, versus switching to Avant) are similar, so there is probably little point in delaying the switch.
 
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Your break fee should be zero, but confirm it with Bank of Ireland.

You could switch to Haven's 2.0% green rate, fixed for 4 years. You will get €2,000 cashback. You will be better off by about €7,300 in four years' time (versus staying on a 2.9% rate with BOI), and that's after accounting for fees and cashback.

Or if you're feeling brave, you could try the strategy outlined in this thread: switch to EBS's 2.9% 1-year fixed rate and get the €4,200 cashback. Then immediately switch to their 2.1% green rate, fixed for four years. You would save an extra €1,500 over the next four years (versus going the Haven route). But nobody knows for sure if EBS will let you make the second switch. If they don't, you'll be stuck on a high (2.9%) rate.

If you're prepared to settle for smaller savings in exchange for a longer fixed rate, switching to Avant't 1.95% rate lets you fix for up to 7 years. You will be better off by about €5,700 in four years' time (versus staying on a 2.9% rate with BOI), and that's after accounting for fees.
 
fungie20 said:
I'm thinking of switching to Avant alright. I should be able to get lowest rate on offer and fixed for a good period of time.
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The Haven strategy outlined in the other thread (if it works) would save you an extra €4,300 over the next four years (versus switching to Avant). But Avant lets you fix for up to 7 years, so it's a question of extra savings versus longer security.
 
The haven approach is unconfirmed so won't be doing that.
 
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