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

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 may 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 €6,640 initial cashback and 2% monthly cashback) will save you about €2,240 over the next 4 years
    • The monthly repayment would be €1,767
    • Note that Permanent TSB discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • For example, if you were an existing Permanent TSB customer, the best rate you would be able to switch to today is 2.95%
    • So if you switch to them now, you will not be eligible to switch to one of their low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).

  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €1,600 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • The monthly repayment would be €1,672

  • Switching immediately to Ulster Bank's 5-year fixed rate (2.2% with no cashback) will not save you or cost you anything over the next 4 years. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
    • The monthly repayment would be €1,711
    • 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 (2.1% with no cashback) will leave you worse off by about €260 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
    • The monthly repayment would be €1,695

  • Switching immediately to Avant Money's 15-year fixed rate (2.25% with no cashback) will leave you worse off by about €2,120 over the next 4 years – but with the even-longer security of 15 years on a fixed rate
    • The monthly repayment would be €1,719

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.4% with no cashback) will leave you worse off by about €3,980 over the next 4 years – but with the even-longer security of 10 or 15 years on a fixed rate
    • The monthly repayment would be €1,743
    • This product has a benefit in relation to moving home in the future that is explained below

These savings estimates use for comparison the scenario of switching to the 2.20% rate with Ulster Bank when the current fixed rate ends. And that's assuming that Ulster Bank (or Permanent TSB, if they have taken over your mortgage by then) are even offering a 2.20% rate in October 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.

The savings estimates also assume that you are currently repaying €1,711 monthly to Ulster Bank, in order to simulate having 20 years left on your mortgage (whether you stay with Ulster Bank or switch to one of the above lenders).

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.

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, if you are at least 3 years into your fixed rate you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move.

If you have had your mortgage with Ulster Bank for less than one year, you will probably not be able to switch to the above lenders. In the case of switching to Permanent TSB, you must have been with your current lender for at least two years.
 
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Because you are on a variable-rate mortgage, you do not have to pay a break fee.
  • Switching immediately to AIB's 3- or 5-year fixed rate (2.35% with €2,000 cashback) will save you about €3,680 over the next 3 years

  • Switching immediately to Avant Money's 3-, 4-, 5- or 7-year fixed rate (1.95% with no cashback) will save you about €3,440 over the next 3 years – but with the longer security of 3 to 7 years on a fixed rate

  • Switching immediately to KBC's 3-year fixed rate (2.25% with no cashback) will save you about €3,440 over the next 3 years. 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 3 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 10-year fixed rate (2.1% with no cashback) will save you about €2,760 over the next 3 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 save you about €2,100 over the next 3 years – but with the even-longer security of 15 years on a fixed rate

  • Switching immediately to Finance Ireland's 10-year fixed rate (2.4% with no cashback) will save you about €1,420 over the next 3 years – but with the even-longer security of 10 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 10- or 15-year fixed rate (2.4% with no cashback) will save you about €1,420 over the next 3 years – but with the even-longer security of 15 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

These savings estimates use for comparison the scenario of staying on the variable rate with KBC and assume that that rate doesn't change between now and April 2025 (which is unlikely). The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

It may seem like it is not worth switching to another lender but bear in mind that your mortgage will soon be owned by Bank of Ireland, whose rates are much higher than KBC'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.

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, if you are at least 3 years into your fixed rate you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move.

If you think that it is somewhat likely that you will be selling up and leaving Ireland in the next few years, it may not be a great idea to enter into a very long-term fixed rate. It might be better to pick a fixed-rate period that ends around the time you might be selling (in order to limit or completely avoid any break fee). That being said, Avant cap the break fee at 2% of the mortgage balance, so your break fee could never be more than about €3,000 with Avant, regardless of how long you fix for.

tadhgof said:
My current underestanding of KBC breaking fee is that it will be 0 if interest rates go up between fixing date and breaking date (which I think is more likely) but im not sure if this is the same with BOI breaking fee.
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It will be zero if interbank interest rates (not mortgage interest rates) increase between the fixing date and the breaking date. All lenders use basically the same formula to calculate the break fee.
 
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My estimate of your break fee is €360. It seems that you might be in the same boat as @boconaill and @mortgagebreaker and @Thrifty_Fifty earlier in this thread – where you have received a surprisingly high break fee quote from KBC. I strongly encourage you to ask for an updated break fee quote on or after 4th May, and please post it here when you receive it.

Anyway, let's assume that your break fee is €720 at the moment.
  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €2,260 over the next 4 years

  • Switching immediately to AIB's 5-year green fixed rate (2.1% with €2,000 cashback) will save you about €1,620 over the next 4 years

  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €540 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 leave you worse off by about €420 over the next 4 years – but with the even-longer security of 10 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 €980 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

  • Switching immediately to Avant Money's 15-year fixed rate (2.25% with no cashback) will leave you worse off by about €1,360 over the next 4 years – but with the even-longer security of 15 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 €2,320 over the next 4 years – but with the even-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

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 September 2023 – it could be higher (or lower). The estimates also account for any fees (break fee, solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

It may seem like it is not worth switching to another lender but bear in mind that your mortgage will soon be owned by Bank of Ireland, whose rates are much higher than KBC'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.

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, if you are at least 3 years into your fixed rate you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move.

I think that it is very unlikely that you would be treated as a new BOI customer when your mortgage transfers to them, i.e., I'd imagine that another lender would look at the amount of time you've been with KBC. The main risk of waiting until the end of the year is that rates may rise before then.

manion said:
Also, Avant money specifies a minimum term of 5 years, If I redeem the mortgage in less than the term (but after leaving their fixed rate) does the 1.5% charge still apply?
Click to expand...
If you are on a variable rate when you pay off the mortgage in full (or in part), no breakage charge applies, even if that happens less than 5 years from now. The only situation in which you may have to pay a breakage charge is when you pay off the mortgage in full (or you overpay by more than 10%) while you are still on a fixed rate.
 
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Thank you, this is quite useful. When I contact them in may I'll ask for the official redemption letter.
 

Many thanks Paul, very informative. Will have to weight up the options and see the best course of action.
 
Paul F said:
Switching immediately to Permanent TSB's 5-year fixed rate (2.55% with €6,640 initial cashback and 2% monthly cashback) will save you about €2,240 over the next 4 years
Click to expand...
@Paul F

Have done some number on this and came up with the following

Stay with UB at 2.2% month repayment €1,711

Switch to PTSB at 2.55% month repayment €1,767

Over 4 years

Extra monthly repayment -2,688
Solicitor fees -1,500
Valuation -150
Cash Back 6,640
2% monthly cashback 1,696 (1,767*2%*48)

Better off 3,998

Am I missing something??
 
Current lender: UB
Outstanding mortgage balance: 940k
Approximate value of your property: 1.25m
The date you started your fixed-rate mortgage: 30 Sept 2018
How many years you fixed for: 4
Your current mortgage interest rate: 2.60%
Your current monthly repayment: €4397
Your property's BER: C1
Are you due to get extra cashback from your current lender in the future: No

Fixed rate coming to an end in a few months. Concerned mortgage may transfer to PTSB by then. Option seems to be Avant 7year 2.15% (gives good security, but hassle and cost of switching) Vs switch on to UB 5 yr 2.2% (easy, just a phone call/form to sign). Risk is what rate may be available in last 2 years if we went for UB vs Avant 7 year. Will check what break fee would be. Very grateful for any advice.
 
Thanks Paul, it's September 2022 so I can refix or end of July as is 60 days out from end date. I'm in a difficult position where up to now computer has said no to get ex off mortgage despite me having sole responsibility through divorce agreement so I may only have an option to refix with ulster bank for as long as possible to avoid PTSB wicked rates for the foreseeable. But you have given me a lot of food for thought so it's time to look at this again
 
Maybe post a separate thread here with some more details and ask for suggestions about what to do.
 
Hi Paul, thank you for all the detailed replies you’ve given on the thread to date, it’s very informative I’m sure it’s giving people lots of food for thought. I’d very much value your thoughts on our situation please.

We have just concluded our first 3 year fixed rate with PTSB, it was a 33 year mortgage, with 30 now remaining. We are now considering moving to Haven at 2.35%, 3 year fixed but reducing the mortgage term to 25 years. Haven will pay €2k towards switching costs.

As this is not our forever home, we are also saving towards a deposit to enable us to move house if we find the right property.

Therefore, with a relatively high possibility we may want to break the new 3 year fixed period at some stage, what approach should we take? Is there a way to estimate future worst case scenario breakage fees? Say within the first year?
  • Current lender: PTSB
  • Outstanding mortgage balance (how much you still owe) €213k
  • Approximate value of your property €290k
  • The date you started your fixed-rate mortgage (month and year): May 2019
  • How many years you fixed for: 3
  • Your current mortgage interest rate: 3.1%
  • Your current monthly repayment (excluding any overpayments): €908
  • Your property's BER (Building Energy Rating) – estimated if necessary: D2 (not reevaluated since some improvements were made)
  • Are you due to get extra cashback from your current lender in the future: No
Thanks for reading!
 

Thanks again so much for this Paul! I really appreciate it. Do you have a or something to ping you a cup of coffee?!

I fixed on the green rate with AIB at the end for 2.15%. I asked to overpay but they messed up the application so I have a window now where I can set it to the level I want for no penalty.

I have capacity to overpay on the loan significantly and considering doing this to about 30-40% (€1,077 --> €1,400/€1,500) per month . I've run the numbers here () and can see how much it will save me over time and it's pretty significant. I have no immediate need for this extra cash and can't see a downside at the moment.

I'm maxed out on monthly pension contributions, don't have any other debt and have money set aside for investment through a broker. Is there anything I'm missing other than missing out on the utility of the extra cash?

Thanks again for your help!
 
  • Current lender: EBS
  • Outstanding mortgage balance: 267,000
  • Approximate value of your property: 400,000
  • The date you started your fixed-rate mortgage: July 2019
  • How many years you fixed for: 3
  • Your current mortgage interest rate: 3%
  • Your current monthly repayment (excluding any overpayments): €1416
  • Your property's BER (Building Energy Rating) - no idea, but getting it assessed soon I hope, probably not 'green'
  • 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? - 1% or 3,300 ish in 2024
I am set on switching - just trying to pick the smartest choice. My fixed rate ends in June anyway. My LTV is ~66% so definitely better rates I can get out there.

Should I decrease the payment term to match my existing monthly repayments? I currently comfortably pay 1400 per month on my mortgage, and would like to sometimes be able to overpay (bonuses etc). Avant allows 10% overpayment a year which is fine (26k), and I understand I can pay a fee to overpay if I wanted to go beyond 10%. But if I stick to my current mortgage terms (27 years, fixed rate of 2.1%) my repayments would drop to ~1100 a month. It looks like if I took a 20 year term my repayments would be €1,357.04 + life insurance, which would come in around the same. I dont see any huge risk in this (ie I can comfortable repay that monthly, plus overpay sometimes). Is this a reasonable approach for me to take? I got some really good advice here that I forgot about which I think is sound.

Solicitor fees: My solicitor quoted me €1600 to switch. I've reached out to Doddle. Do I need both a broker and a solicitor? I think yes. Solicitor to deal with banks, broker to deal with Avant?

Life Insurance, I went with life insurance with EBS because it was easiest. It was a bit of a faff because I am fat, which is discriminatory, but I digress. If I am switching can I keep my life insurance with them to save the hassle of dealing with all of that again?

Fixed term period; any guidance on whether to pick 3 - 4 - 5 - 10 year terms?
 
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  • Current lender: KBC
  • Outstanding mortgage balance (how much you still owe): €381k
  • Approximate value of your property: €635k
  • The date you started your fixed-rate mortgage (month and year): March 2020
  • How many years you fixed for: 5 years Fixed, 30 Year Mortgage (~28 years remaining)
  • Your current mortgage interest rate: 2.45%
  • Your current monthly repayment (excluding any overpayments): €1,570
  • Your property's BER (Building Energy Rating): C2
  • Are you due to get extra cashback from your current lender in the future: No cashback due

This is a super helpful forum, love the open discussion here! I am exploring switching, as keep reading about rate hikes in US/UK + also ECB.

Research To-date:
- Spoken to my existing lender KBC, aware BOI have bought their mortgage book & historically they've had expensive variables/rates
- Confirmed no break-fee will be owed to exit my fixed term (3 years remaining on 5 year fix)

Would love any guidance/tips on what I should be considering.
 
Your break fee should be around €2,260 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 may 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 €18,800 initial cashback and 2% monthly cashback) will save you about €8,080 over the next 4 years
    • Note that Permanent TSB discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • For example, if you were an existing Permanent TSB customer, the best rate you would be able to switch to today is 2.95%
    • So if you switch to them now, you will not be eligible to switch to one of their low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).

  • Switching immediately to AIB's 4-year fixed rate (2.2% with €2,000 cashback) will leave you worse off by about €80 over the next 4 years

  • Switching immediately to Avant Money's 7-year fixed rate (2.15% with no cashback) will leave you worse off by about €320 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Ulster Bank's 5-year fixed rate (2.2% with no cashback) will leave you worse off by about €620 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 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 (2.3% with no cashback) will leave you worse off by about €5,700 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 leave you worse off by about €12,860 over the next 4 years – but with the even-longer security of 15 years on a fixed rate

  • Switching immediately to Finance Ireland's 10-or 15-year fixed rate (2.65% with no cashback) will leave you worse off by about €18,260 over the next 4 years – but with the even-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
    • And your interest rate (initially 2.65%) will automatically fall as time passes and you move into lower loan-to-value (LTV) brackets. See the section "How we decide rate reductions" on this page.
    • Note: Finance Ireland say: "Borrow up to €1,000,000 in Dublin city and county up to €750,000 elsewhere"

These savings estimates use for comparison the scenario of switching to the 2.20% rate with Ulster Bank when the current fixed rate ends. And that's assuming that Ulster Bank (or Permanent TSB, if they have taken over your mortgage by then) are even offering a 2.20% rate in October 2022 – it could be higher (or lower). The estimates also account for any fees (break fee, solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

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, if you are at least 3 years into your fixed rate you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move.
 
  • Current lender: PTSB
  • Outstanding mortgage balance (how much you still owe): €295k
  • Approximate value of your property: €480k (12 months ago so likely to have increased)
  • The date you started your fixed-rate mortgage (month and year): April 2021 (fixed year just ending)
  • How many years you fixed for: 1, being moved now onto the variable rate
  • Your current mortgage interest rate: Jumping to a whopping 3.8%
  • Your current monthly repayment (excluding any overpayments): €1,200 at the fixed rate, we were making a €250 overpayment on top of this. Monthly repayment will go up with move back to variable.
  • Your property's BER (Building Energy Rating): A3
  • Are you due to get extra cashback from your current lender in the future: No cashback due
Hi there, we are looking to switch ASAP from PTSB. We were with EBS previously so open to any other provider. Don't mind switching frequently (after a year each time) so happy to fix for a year in order to avail of cashback or will consider fixing for a longer period either.

Any recommendations? I'm playing with the various switching sites but seems to be getting conflicting info.
 
Update:

Re-fixed with KBC for 3 years. Just a simple form to complete with no valuation. Betting on the ability to switch from BOI in 3 years time if there FR and/or variables are too high. Avant rates could at that time be the same as today, lower or higher of course. no matter how times I rolled the dice there was much difference in benefits/risk. Thanks again Paul. Peace of mind for 3 years without the extra hassle.
 

Few other things that may be interesting:

what will be the principal amount left owning at the end of 4 years on both, should be a bit more on the higher interest rate, so thats a negative and also the account you need to have for the monthly cash back has a 6 euro per month fee so a negative 288 to the calcs.
 
That is a chunky mortgage you have there. If I were you, I would be stress testing those last 2 years. We have been in a period of low interests and appear to be heading into some economic turmoil so I wouldn't want to bet my house on interest rates being low in 2027. Historic mortgage rates in Ireland are below. It's easy to forget. Depends on your personal risk appetite.

I just switched to Avant 7 year fixed rate and it was a hassle but it wasn't that bad given that I'm a proprietary director and my wife is part time PAYE and part-time sole trader.


YearHighest Mortgage Interest Rate
197512.5%
197613.95%
197713.96%
197814.15%
197914.15%
198014.15%
198116.25%
198216.25%
198313%
198411.75%
198513%
198612.5%
198712.5%
19889.25%
198911.4%
199012.37%
199111.95%
199213.99%
199313.99%
19947.49%
19957.00%
19966.75%
19976.9%
19985.85%
19995.6%
20006.09%
20016.9%
20024.7%
20034.2%
20043.49%
20053.65%
20064.86%
20075.46%
20085.86%
20094.16%
20104.02%
20114.42%
20124.33%
21034.38%
20144.2%
20154.05%
20163.61%
20173.44%
20183.21%
20193.02%
20202.92%
20212.8%
 
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