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

Your break fee might be around €40 at the moment – but take that with a pinch of salt. Confirm it with KBC (and please post it here when you receive it, including the date of the letter).
  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €4,280 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €2,700 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will save you about €1,340 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
  • Switching immediately to Avant Money's 15-year fixed rate (2.25% with no cashback) will leave you worse off by about €20 over the next 4 years – but with the even-longer security of 15 years on a fixed rate
  • Switching immediately to KBC's 5-year fixed rate (2.4% with no cashback) will leave you worse off by about €60 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
    • Of course, if you decide to do this, you will probably want to switch again in 5 years when your fixed rate expires and your mortgage moves onto Bank of Ireland's books, at which point you will be subject to their (probably higher) interest rates
These savings estimates use for comparison the scenario of switching to the 2.25% rate with KBC when the current fixed rate ends. And that's assuming that KBC (or Bank of Ireland, if they have taken over your mortgage by then) are even offering a 2.25% rate in November 2023 – it could be higher (or lower). The estimates also account for fees and any cashback offered by the above lenders.

Note that the longer you fix for, the higher the break fee could potentially be in the future, which could be relevant if you want to move home. Of course, it's also possible for a future break fee to be small or zero. And at least some of Avant's fixed rates allow you to "take your mortgage with you" if you move home, which avoids any future break fee. It would be worth contacting them for clarification on which mortgages this applies to and on the terms and conditions.
 
Last edited:
Hi Paul,
Many many thanks for this. And apologies for responding so slowly [for some reason, I did not get a notification about the reply]. Is there a spreadsheet or similar that allows me to plug in different wholesale rates ["Funding Cost" as per Finance Ireland's terminology] and see how things change? Ideally, I'd also like to plug in other costs such as valuation cost and solicitor's fees, etc.

Finance Ireland have not (yet) responded to my email request for a break fee quote. I'll come back and update this post, when they do.
 
Thanks very much Paul for the info. Haven's deal looks excellent, good savings to be made there. I didn't realise we'd be paying a breakage fee if moving home. We are planning to move house in the next year so Avant is probably a winner then.

Back to KBC, I've asked for breakage fees and I am not getting anywhere near your figure. Looks like I'm in the same boat as mortgagebreaker has detailed in previous posts.

Breakage fees this year:

DateFee
26-JAN-223,012
14-MAR-222,901
12-APR-222,840

Roughly dropping by 50-60 a month. I requested these on the phone. I thought when I received the quote in January I was being bluffed on the phone so requested a letter confirming the fee. Unfortunately, the letter was a similar fee (3,000).
I have requested other breakage fees last year, but I didn't take note of or action on them as they were very high. It's disappointing that the fees are so high especially with KBC leaving the market. The fee has steadily and slowly reduced over time but is nowhere near low enough to leave for another provider.

On the last call I made to KBC, they told me to ring at the start of the month for a breakage fee. He believed the fees are cheaper at the start of the month. I'll try that in May.
 
Hi Paul, if you could take a look at this please it would be much appreciated.
  • Current lender: BOI
  • Outstanding mortgage balance (how much you still owe) €275k
  • Approximate value of your property €400k
  • The date you started your fixed-rate mortgage (month and year): November 2021
  • How many years you fixed for: 1
  • Your current mortgage interest rate: 2.9%
  • Your current monthly repayment (excluding any overpayments): €1,385
  • Your property's BER (Building Energy Rating) – estimated if necessary: C1
  • Are you due to get extra cashback from your current lender in the future: €3,300 in November 2023
 
BagzOfNoMoney said:
Many many thanks for this. And apologies for responding so slowly [for some reason, I did not get a notification about the reply].
Click to expand...
Check your (scroll down that page).

BagzOfNoMoney said:
Is there a spreadsheet or similar that allows me to plug in different wholesale rates ["Funding Cost" as per Finance Ireland's terminology] and see how things change?
Click to expand...
No – I use these swap rates as a proxy, but they are only a proxy. Have a look at this old post about estimating break fees.

BagzOfNoMoney said:
Ideally, I'd also like to plug in other costs such as valuation cost and solicitor's fees, etc.
Click to expand...
The savings estimates I gave you already assume solicitors' fees of €1,300 (all in) and a valuation fee of €150 or €185 (depending on the lender).
 
  • Current lender: Ulster Bank
  • Outstanding mortgage balance (how much you still owe): 326K
  • Approximate value of your property: 480K
  • The date you started your fixed-rate mortgage (month and year) March 21
  • How many years you fixed for 5
  • Your current mortgage interest rate 2.2%
  • Your current monthly repayment (excluding any overpayments) €1261.75
  • Your property's BER (Building Energy Rating) – estimated if necessary N/A
  • 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
Planning to switch to avant 7 year fix at 1.95 so we should make some savings and also the financial stability of a longer fix in the wake of the volatility coming down the tracks.
 
boconaill said:
On the last call I made to KBC, they told me to ring at the start of the month for a breakage fee. He believed the fees are cheaper at the start of the month. I'll try that in May.
Click to expand...

Unbelievable. I don't understand that. It seems as though my break fee has been going down only because the number of months remaining in the fixed term is decreasing. I am not sure if I have seen any impact of volatile market rates in any of the break fee quotes that I have gotten from KBC.
 
I resurrected this old thread because I'm trying to figure out if KBC could have hedged their lending/borrowing rates in some way, and if so their "cost of breakage" would only change every time they hedge.

Can anyone shed any light on this idea?
 
Hi Paul, if you could take a look at this please it would be much appreciated.
  • Current lender: BOI
  • Outstanding mortgage balance (how much you still owe) €170k
  • Approximate value of your property €320k
  • The date you started your fixed-rate mortgage (month and year): June 2019
  • How many years you fixed for: 5
  • Your current mortgage interest rate: 3.2%
  • Your current monthly repayment (excluding any overpayments): €833
  • Your property's BER (Building Energy Rating) – estimated if necessary: C2
  • Are you due to get extra cashback from your current lender in the future: No
Was hoping to switch to Avant but after discussing with the broker, they have said they won't deal with us due to shared entrance.
 
Thanks Paul - letter received from BOI confirming zero break cost. Thanks for the heads up - they gave me a cost of circa €18k 2 years ago and I naively thought it wouldn't have changed much as interest rates were still so low. Can you explain why it has moved so much. Letter received today and dated 6th April.

Thanks,

James
 
friday2018 said:
Thanks for the heads up - they gave me a cost of circa €18k 2 years ago and I naively thought it wouldn't have changed much as interest rates were still so low. Can you explain why it has moved so much.
Click to expand...
The break fee depends on:
  • Your outstanding balance
  • How long is left on the fixed-rate period
  • The change in interbank interest rates (not mortgage interest rates) from when you fixed to now
As interbank interest rates rise, the break fee falls (all other things being equal) – and interbank interest rates having been rising quite a lot lately.
 
Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Bank of Ireland (and please post it here when you receive it, including the date of the letter).
  • Switching immediately to Permanent TSB's 5-year fixed rate (2.55% with €5,500 initial cashback and 2% monthly cashback) will save you about €5,400 over the next 4 years
  • Switching immediately to AIB's 4-year fixed rate (2.2% with €2,000 cashback) will save you about €4,560 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (2.05% with no cashback) will save you about €4,080 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Switching immediately to Avant Money's 10-year fixed rate (2.2% with no cashback) will save you about €2,520 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
  • Switching immediately to Avant Money's 15-year fixed rate (2.4% with no cashback) will save you about €440 over the next 4 years – but with the even-longer security of 15 years on a fixed rate
  • Switching immediately to Bank of Ireland's 5-year fixed rate (3.0% and you would get the 1% (€3,300) cashback in Nov 2023) will leave you worse off by about €1,220 over the next 4 years. But 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 2.90% rate with Bank of Ireland when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 2.90% rate in November 2022 – it could be higher (or lower). You would get the Bank of Ireland €3,300 future cashback in such a scenario, and the savings estimates account for this. The estimates also account for fees and any cashback offered by the above lenders.

The 2.55% 5-year rate from PTSB is good over the next five years, but after that you won't be eligible to switch to their best rates – those are reserved for new customers only.

You must be with your current lender at least 12 months to switch to Avant, and at least 2 years to switch to PTSB – which I assume you are.

Note that the longer you fix for, the higher the break fee could potentially be in the future, which could be relevant if you want to move home. Of course, it's also possible for a future break fee to be small or zero. And at least some of Avant's fixed rates allow you to "take your mortgage with you" if you move home, which avoids any future break fee. It would be worth contacting them for clarification on which mortgages this applies to and on the terms and conditions.

The estimates also assume that your loan-to-value ratio (LTV) really is below 70% so that you are eligible for the listed rates. Your LTV estimate is 275.0k/400.0k = 68.8%. If you get a valuation of less than €393k, you will need to make a few more monthly mortgage payments and/or a small overpayment to get the LTV below 70%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.
 
Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Ulster Bank (and please post it here when you receive it, including the date of the letter).

Note: you will receive two separate letters from Ulster Bank a few days apart, and their structure and wording can lead to confusion. Look for the line that says: "To break out of this fixed rate early, you would have to pay a fee of €X". That amount is your break fee. Ignore all other references to break fees.
  • Switching immediately to Permanent TSB's 5-year fixed rate (2.55% with €6,520 initial cashback and 2% monthly cashback) will save you about €1,620 over the next 4 years
  • Switching immediately to AIB's 4-year fixed rate (2.2% with €2,000 cashback) will save you about €540 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (2.05% with no cashback) will save you about €400 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Breaking and re-fixing with Ulster Bank on the 5-year 2.2% rate will "reset the clock" and give you another 5 years on that rate and will not save you or cost you any money. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
    • Of course, if you decide to do this, you will probably want to switch again in 5 years when your fixed rate expires and your mortgage moves onto Permanent TSB's books, at which point you will be subject to their (probably higher) interest rates
  • Switching immediately to Avant Money's 10-year fixed rate (2.2% with no cashback) will leave you worse off by about €1,500 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
  • Switching immediately to Avant Money's 15-year fixed rate (2.4% with no cashback) will leave you worse off by about €4,020 over the next 4 years – but with the even-longer security of 15 years on a fixed rate
These savings estimates use for comparison the scenario of doing nothing. The estimates also account for fees and any cashback offered by the above lenders.

The 2.55% 5-year rate from PTSB is good over the next five years, but after that you won't be eligible to switch to their best rates – those are reserved for new customers only.

It may seem like it is not worth switching to another lender but bear in mind that your mortgage will soon be owned by Permanent TSB, whose rates are much higher than Ulster Bank's. So if you don't switch now, you might find that you really want to switch in a few years' time, at which point rates might be higher.

Note that the longer you fix for, the higher the break fee could potentially be in the future, which could be relevant if you want to move home. Of course, it's also possible for a future break fee to be small or zero. And at least some of Avant's fixed rates allow you to "take your mortgage with you" if you move home, which avoids any future break fee. It would be worth contacting them for clarification on which mortgages this applies to and on the terms and conditions.

The estimates also assume that your loan-to-value ratio (LTV) really is below 70% so that you are eligible for the listed rates. Your LTV estimate is 326.0k/480.0k = 67.9%. If you get a valuation of less than €466k, you will need to make a few more monthly mortgage payments and/or a small overpayment to get the LTV below 70%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.

_ripped_off said:
Planning to switch to avant 7 year fix at 1.95
Click to expand...
You are not eligible for the Avant 7-year fixed rate at 1.95% (because your loan-to-value ratio is too high) – but you are eligible to switch to any of the rates listed above, including the Avant 7-year fixed rate at 2.05%.
 
Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Bank of Ireland (and please post it here when you receive it, including the date of the letter).
  • Switching immediately to KBC's 5-year fixed rate (2.4% with €3,000 cashback) will save you about €5,920 over the next 4 years
    • Of course, if you decide to do this, you will probably want to switch again in 5 years when your fixed rate expires and your mortgage moves onto Bank of Ireland's books, at which point you will be subject to their (probably higher) interest rates
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €5,800 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Switching immediately to Permanent TSB's 4-year fixed rate (2.05% with 2% monthly cashback) will save you about €5,600 over the next 4 years
  • Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will save you about €4,820 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
  • Switching immediately to AIB's 5-year fixed rate (2.45% with €2,000 cashback) will save you about €4,580 over the next 4 years
  • Switching immediately to Avant Money's 15-year fixed rate (2.25% with no cashback) will save you about €3,860 over the next 4 years – but with the even-longer security of 15 years on a fixed rate
  • Switching immediately to Finance Ireland's 5-year fixed rate (2.3% with no cashback) will save you about €3,520 over the next 4 years
  • Switching immediately to Finance Ireland's 10-year fixed rate (2.4% with no cashback) will save you about €2,880 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
  • Switching immediately to Finance Ireland's 15-year fixed rate (2.4% with no cashback) will save you about €2,880 over the next 4 years – but with the even-longer security of 15 years on a fixed rate
  • Switching immediately to Bank of Ireland's 5-year fixed rate (3.0% with no cashback) will save you about €300 over the next 4 years. 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 2.90% rate with Bank of Ireland when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 2.90% rate in June 2024 – it could be higher (or lower). The estimates also account for fees and any cashback offered by the above lenders.

The 2.05% 4-year rate from PTSB is good over the next four years, but after that you won't be eligible to switch to their best rates – those are reserved for new customers only.

Note that the longer you fix for, the higher the break fee could potentially be in the future, which could be relevant if you want to move home. Of course, it's also possible for a future break fee to be small or zero. And at least some of Avant's and Finance Ireland's fixed rates allow you to "take your mortgage with you" if you move home, which avoids any future break fee. It would be worth contacting them for clarification on which mortgages this applies to and on the terms and conditions.

Colm G said:
Was hoping to switch to Avant but after discussing with the broker, they have said they won't deal with us due to shared entrance.
Click to expand...
I've included the Avant rates in the above list even though they are a non-runner for you. Do you mean that Avant won't deal with you or the broker won't deal with you?
 
What a great thread - so happy to find this. We are hoping to switch, costs depending:

  • Current lender: BOI
  • Outstanding mortgage balance (how much you still owe): 302k
  • Approximate value of your property: 360k
  • The date you started your fixed-rate mortgage (month and year): December 2020
  • How many years you fixed for: 3
  • Your current mortgage interest rate : 2.8%
  • Your current monthly repayment (excluding any overpayments): €1308
  • Your property's BER (Building Energy Rating) – : A2
  • Are you due to get extra cashback from your current lender in the future: NO
 
Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Bank of Ireland (and please post it here when you receive it, including the date of the letter).
  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €10,520 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (2.15% with no cashback) will save you about €6,760 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Switching immediately to Avant Money's 10-year fixed rate (2.3% with no cashback) will save you about €5,000 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
  • Switching immediately to Avant Money's 15-year fixed rate (2.5% with no cashback) will save you about €2,680 over the next 4 years – but with the even-longer security of 15 years on a fixed rate
  • Switching immediately to Bank of Ireland's 5-year fixed rate (3.0% with no cashback) will leave you worse off by about €1,840 over the next 4 years. But 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 2.90% rate with Bank of Ireland when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 2.90% rate in December 2023 – it could be higher (or lower). The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

Note that the longer you fix for, the higher the break fee could potentially be in the future, which could be relevant if you want to move home. Of course, it's also possible for a future break fee to be small or zero. And at least some of Avant's fixed rates allow you to "take your mortgage with you" if you move home, which avoids any future break fee. It would be worth contacting them for clarification on which mortgages this applies to and on the terms and conditions.

The estimates also assume that you get your loan-to-value ratio (LTV) below 80% so that you are eligible for all of the listed rates. You are only eligible to switch to Avant if you get your LTV below 80%. But with your current LTV you are already eligible to switch to Haven.

Your LTV is currently 302k/360k = 83.9%. A higher property valuation (€378k) and/or a few more monthly mortgage payments and/or an overpayment will get you below 80%.

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 €13,520 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.
 
Last edited:
I've requested the break fee twice in the last 3 weeks from KBC. Still waiting.

Anyone else having delays with them? Is there a way to speed up the process?
 
Paul F said:
Other people here seem to get the break fee over the phone without too much difficulty. @mortgagebreaker, @boconaill Any advice?
Click to expand...
They have always been able give it over the phone, including any of the finer details such as the figures used in the calculations. AFAIK that is the only way to do it and it's the same process as getting it posted out - you have to call and be put through to the mortgage team in both cases.
 
You must log in or register to reply here.
Menu
Log in
Register