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

[Paul F]

• Current lender: KBC
• Outstanding mortgage balance (how much you still owe): 360K
• Approximate value of your property: 480K
• The date you started your fixed-rate mortgage (month and year): 8/2020
• How many years you fixed for: 3 yrs
• Your current mortgage interest rate: 2.35%
• Your current monthly repayment (excluding any overpayments): 2,356
• Your property's BER (Building Energy Rating) – check it here or estimate it if necessary: B2
• 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

Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with KBC (and please post it here when you receive it, including the date of the letter).

• Switching immediately to Permanent TSB's 5-year green fixed rate (2.35% with €7,200 initial cashback and 2% monthly cashback) will save you about €7,280 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 Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €4,660 over the next 4 years
  
  
• Switching immediately to AIB's 5-year green fixed rate (2.15% with €2,000 cashback) will save you about €2,720 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 Haven's 7-year fixed rate (2.65% with €5,000 cashback) will leave you worse off by about €800 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to KBC's 5-year fixed rate (2.45% with no cashback) will leave you worse off by about €1,900 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
  • Note that if you decide to do this, your mortgage will soon move onto Bank of Ireland's books, and they discriminate between new and existing customers, i.e., their best rates are not available to existing customers
  • For example, if you were an existing Bank of Ireland customer, the best rate you would be able to switch to today is 3%
  • So if you switch to this KBC offer now, you will probably not be eligible to switch to one of Bank of Ireland's 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 10-year fixed rate (2.6% with no cashback) will leave you worse off by about €5,180 over the next 4 years – but with the even-longer security of 10 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 €5,840 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.

These savings estimates use for comparison the scenario of switching to the 2.30% 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 2.30% rate in August 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.

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 (again, subject to certain conditions).

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 €7,660 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.

Considering 4 year green BOI @ 1.9%

Both Permanent TSB's 5-year green fixed rate (2.35% with cashback) and Haven's 4-year green fixed rate (2.0% with cashback) will give you bigger savings than BOI's 1.9% rate over the next 4 years. And if you switch to BOI, after 4 years you will only be eligible to move to one of their high interest rates, since you will be an existing customer. And you won't even be eligible for the 0.3% green discount again – that is also reserved for new customers.

 

[Paul F]

For Info, received a €0 break fee from Ulster Bank. Remaining with UB and going for a further 5 year fixed at 2.45%. Mortgage details provided below for reference:

Current lender - Ulster Bank
Outstanding mortgage balance (how much you still owe) - 240K
Approximate value of your property - 350K
The date you started your fixed-rate mortgage (month and year) - Aug 2019
How many years you fixed for - 5 yrs (Ends on 31/12/2024)
Your current mortgage interest rate - 2.6%
Your current monthly repayment (excluding any overpayments) - 875
Your property's BER (Building Energy Rating) – check it here or estimate it if necessary - D1
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? - None

@Kigera Are you sure you have provided your details correctly? They imply that you have almost 35 years left on your mortgage, which seems unlikely. Did you take a payment break?

 

[Paul F]

Is there a way for me to predict the breakage fee. I don’t know what R or R1 is in the formula provided by BOI

In your case, R is about -0.33% (see here for October 2021). And R1 is currently about +0.381% (see here for today's date).

Your break fee will stay at zero unless R1 falls to about -0.13%, which doesn't seem very likely – although nothing is certain.

 

[Kigera]

@Kigera Are you sure you have provided your details correctly? They imply that you have almost 35 years left on your mortgage, which seems unlikely. Did you take a payment break?

@Paul F Figures correct, 31 or 32 years remaining. No Payment break, originally just took mortgage out over 35 years.

 

[Newbie!]

• Current lender: KBC
• Outstanding mortgage balance (how much you still owe): 260k
• Approximate value of your property: 460K
• The date you started your fixed-rate mortgage (month and year): have split mortgage ..approx 30% is on 3.9 variable (18yrs remain), remainder is tracker at 2.2% (12yrs remain)
• How many years you fixed for: n/a
• Your current mortgage interest rate: as above
• Your current monthly repayment (excluding any overpayments): 2,090
• Your property's BER (Building Energy Rating) – check it here or estimate it if necessary: C1
• 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?

Just to clarify, the split mortgage is a result of selling our first home and retaining the tracker. Additional borrowed money was borrowed on a variable rate.

We are considering moving to PTSB, possibly the green 5yr with cashback (currently 2.35%). What are the wary/weak points in moving to PTSB? (Also considering moving current account to PTSB).

 

[Paul F]

@Newbie! What term would you like your new mortgage to have? I.e., after how many years do you want to have it paid off?

 

[Mail2017]

@Mail2017 Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with KBC (and please post it here when you receive it, including the date of the letter).

• Switching immediately to Permanent TSB's 5-year green fixed rate (2.35% with €6,640 initial cashback and 2% monthly cashback) will save you about €6,160 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 Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €5,140 over the next 4 years
  
  
• Switching immediately to AIB's 5-year green fixed rate (2.15% with €2,000 cashback) will save you about €3,200 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 7-year fixed rate (2.05% with no cashback) will save you about €2,460 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • You would have to shorten your mortgage term to 30 years to be eligible for this rate
  • The monthly repayment would be €1,235
  
  
• Switching immediately to Avant Money's 10-year fixed rate (2.2% with no cashback) will save you about €520 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
  • You would have to shorten your mortgage term to 30 years to be eligible for this rate
  • The monthly repayment would be €1,261
  
  
• Switching immediately to KBC's 5-year fixed rate (2.45% with no cashback) will leave you worse off by about €1,360 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
  • Note that if you decide to do this, your mortgage move will soon move onto Bank of Ireland's books, and they discriminate between new and existing customers, i.e., their best rates are not available to existing customers
  • For example, if you were an existing Bank of Ireland customer, the best rate you would be able to switch to today is 3%
  • So if you switch to this KBC offer now, you will not be eligible to switch to one of Bank of Ireland's 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 Finance Ireland's 10- or 15-year fixed rate (2.55% with no cashback) will leave you worse off by about €4,000 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 2.55%) 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.

These savings estimates use for comparison the scenario of switching to the 2.30% 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 2.30% rate in December 2022 – 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.

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 (again, subject to certain conditions).

The Avant and Finance Ireland estimates also assume that you get your loan-to-value ratio (LTV) below 70% so that you are eligible for their listed rates. Your LTV is currently 332k/460k = 72.2%. A slightly higher property valuation (€475k) and/or a few more monthly mortgage payments and/or a small overpayment will get you below 70%. Your LTV is already low enough for the other rates listed.

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 €8,140 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.

If you want savings estimates for longer-term fixed rates, let me know.

Hi Paul - KBC have confirmed €0 break fee which is fantastic - however the letter states this is only valid for 10 days. I've commenced the switching process which is likely to take several weeks. Is there a risk that by the time we're ready to switch, there could be a break fee?

 

[Newbie!]

@Newbie! What term would you like your new mortgage to have? I.e., after how many years do you want to have it paid off?

Probably 13/14.

 

[Paul F]

I've commenced the switching process which is likely to take several weeks. Is there a risk that by the time we're ready to switch, there could be a break fee?

Technically, yes, there is a risk. But because there's isn't a very long time left on your fixed rate (~7 months), it would be very unlikely to be huge. A break fee of €500 is plausible (but it still seems unlikely, because certain interbank interest rates would have to drop for that to happen).

You could call KBC every month or so and get an updated break fee quote.

 

[twelve]

Hi all, great thread for guidance. Thanks in advance - my situation is:

• Current lender - ptsb
• Outstanding mortgage balance (how much you still owe) - 180000
• Approximate value of your property - 360000
• The date you started your fixed-rate mortgage (month and year) N/A
• How many years you fixed for - n/a
• Your current mortgage interest rate 2.3%
• Your current monthly repayment (excluding any overpayments) 900
• Your property's BER (Building Energy Rating) – check it here or estimate it 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

There's a smaller topup mortgage on this property which is fixed (expiring Oct) but we're currently exploring redemption values for that. Thanks in advance!

Approx 18 years remaining on mortgage at this stage, if that is worthwhile noting

 

[Lucan22]

Hi All,

Very helpful thread. Thanks a lot for the information.
I plan on moving house in 2-3 years time.

My details are:

Current lender - Bank Of Ireland
Outstanding mortgage balance (how much you still owe) - 303K
Approximate value of your property - 410K
The date you started your fixed-rate mortgage (month and year) - Aug 2018
How many years you fixed for - 5 years
Your current mortgage interest rate - 3%
Your current monthly repayment (excluding any overpayments) - 1395
Your property's BER (Building Energy Rating) – check it here or estimate it 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? - Yes, 3000 in Aug 2023

 

[Paul F]

@twelve Are you saying you are on a variable rate? PTSB don't have a 2.3% variable rate.

Your figures also imply that there are 21 years left on your mortgage. Can you check everything again?

 

[Paul F]

Current lender - Ulster Bank
Outstanding mortgage balance (how much you still owe) - 240K
Approximate value of your property - 350K
The date you started your fixed-rate mortgage (month and year) - Aug 2019
How many years you fixed for - 5 yrs (Ends on 31/12/2024)
Your current mortgage interest rate - 2.6%
Your current monthly repayment (excluding any overpayments) - 875
Your property's BER (Building Energy Rating) – check it here or estimate it if necessary - D1
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? - None

@Kigera Are you sure you have provided your details correctly? They imply that you have almost 35 years left on your mortgage, which seems unlikely. Did you take a payment break?

@Paul F Figures correct, 31 or 32 years remaining. No Payment break, originally just took mortgage out over 35 years.

Well, something seems off about your figures, but I'll use them as they are.

• Switching immediately to Permanent TSB's 4-year fixed rate (2.05% with 2% monthly cashback) will save you about €3,100 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 Avant Money's 4-year fixed rate (2.05% with no cashback) will save you about €2,540 over the next 4 years
  • You would have to shorten your mortgage term to 30 years to be eligible for this rate
  • The monthly repayment would be €893
  
  
• Switching immediately to AIB's 5-year fixed rate (2.45% with €2,000 cashback) will save you about €860 over the next 4 years
  
  
• Switching immediately to Avant Money's 5-year fixed rate (2.25% with no cashback) will save you about €680 over the next 4 years
  • You would have to shorten your mortgage term to 30 years to be eligible for this rate
  • The monthly repayment would be €917
  
  
• Switching immediately to Ulster Bank's 4- or 5-year fixed rate (2.45% 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).
  • Note that if you decide to do this, your mortgage will soon move onto Permanent TSB's books, and they discriminate between new and existing customers, i.e., their best rates are not available to existing customers
  • The same warnings as above regarding higher Permanent TSB rates in the future apply
  
  
• Switching immediately to Avant Money's 7-year fixed rate (2.35% with no cashback) will leave you worse off by about €240 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • You would have to shorten your mortgage term to 30 years to be eligible for this rate
  • The monthly repayment would be €930
  
  
• Switching immediately to Avant Money's 10-year fixed rate (2.5% with no cashback) will leave you worse off by about €1,640 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
  • You would have to shorten your mortgage term to 30 years to be eligible for this rate
  • The monthly repayment would be €948
  
  
• Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.55% with no cashback) will leave you worse off by about €2,120 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 2.55%) 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.
  
  
• Switching immediately to Ulster Bank's 7- or 10-year fixed rate (2.95% with no cashback) will leave you worse off by about €4,400 over the next 4 years – but with the even-longer security of 7 or 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
  • The same warnings as above regarding higher Permanent TSB rates in the future apply

These savings estimates use for comparison the scenario of switching to the 2.25% 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 2.25% rate in January 2025 – 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.

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 (and it might be impossible to switch if your financial situation has deteriorated).

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 (again, subject to certain 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 240.0k/350.0k = 68.6%. If you get a valuation of less than €343k, 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.

If you want savings estimates for longer-term fixed rates, let me know.

 

[Paul F]

Current lender - Bank Of Ireland
Outstanding mortgage balance (how much you still owe) - 303K
Approximate value of your property - 410K
The date you started your fixed-rate mortgage (month and year) - Aug 2018
How many years you fixed for - 5 years
Your current mortgage interest rate - 3%
Your current monthly repayment (excluding any overpayments) - 1395
Your property's BER (Building Energy Rating) – check it here or estimate it 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? - Yes, 3000 in Aug 2023

Your break fee should be around €760 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 green fixed rate (2.35% with €6,060 initial cashback and 2% monthly cashback) will save you about €6,500 over the next 3 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).
  • These concerns are not relevant to you if you think it is quite likely that you will be moving home in a few years (since you will need a new mortgage at that point anyway)
  
  
• Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €4,800 over the next 3 years
  
  
• Switching immediately to Haven's 3-year fixed rate (2.35% with €5,000 cashback) will save you about €4,700 over the next 3 years
  
  
• Switching immediately to AIB's 5-year green fixed rate (2.15% with €2,000 cashback) will save you about €3,480 over the next 3 years
  • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)
  • And for the same reason it is quite likely that there will be no break fee if you break out of this rate in, e.g., 3 years' time when you move
  
  
• Switching immediately to Haven's 7-year fixed rate (2.65% with €5,000 cashback) will save you about €2,060 over the next 3 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Avant Money's 7-year fixed rate (2.45% with no cashback) will leave you worse off by about €1,220 over the next 3 years – but with the even-longer security of 7 years on a fixed rate
  
  
• Switching immediately to Avant Money's 10-year fixed rate (2.6% with no cashback) will leave you worse off by about €2,540 over the next 3 years – but with the even-longer security of 10 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 €2,980 over the next 3 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.
  
  
• Switching immediately to Bank of Ireland's 3- or 5-year fixed rate (3.0% and you would get the 1% (€3,300) cashback in August 2023) will leave you worse off by about €1,440 over the next 3 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 August 2023 – 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 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 you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move (again, subject to certain conditions).

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 €7,800 in three 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.

If you think there is a reasonable or strong possibility that you really will move in the next 2 to 3 years, you should probably either fix for 5 years or less, or choose one of Finance Ireland's 10-year or longer fixed rates. That is because Finance Ireland's 10-year and longer fixed rates will waive or refund any break fee when you move, and will allow you to keep the same interest rate even after you move (subject to certain conditions), which might appeal to you. (Note that you'll still have to pay legal and valuation fees when moving, and any extra amount you borrow in order to buy your new place will attract whatever interest rate Finance Ireland are offering at that time.) Ultimately, though, it's your decision.

If you want savings estimates for longer-term fixed rates, let me know.

 

[Sportage]

Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with KBC (and please post it here when you receive it, including the date of the letter).

• Switching immediately to AIB's 5-year fixed rate (2.35% with €2,000 cashback) will save you about €100 over the next 3 years
  
  
• Switching immediately to Permanent TSB's 4-year fixed rate (2.05% with 2% monthly cashback) will save you about €20 over the next 3 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).
  • As you know, Permanent TSB will only let you switch to them if you have been with your current lender for at least 2 years. But give them a call and see if there is any flexibility around this.
  
  
• Switching immediately to Avant Money's 4-year fixed rate (1.95% with no cashback) will leave you worse off by about €180 over the next 3 years
  
  
• Switching immediately to KBC's 5-year fixed rate (2.4% with no cashback) will leave you worse off by about €670 over the next 3 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
  • Note that if you decide to do this, your mortgage will soon move onto Bank of Ireland's books, and they discriminate between new and existing customers, i.e., their best rates are not available to existing customers
  • For example, if you were an existing Bank of Ireland customer, the best rate you would be able to switch to today is 3%
  • So if you switch to this KBC offer now, you will probably not be eligible to switch to one of Bank of Ireland's 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 5-year fixed rate (2.15% with no cashback) will leave you worse off by about €1,060 over the next 3 years
  
  
• Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will leave you worse off by about €1,500 over the next 3 years – but with the even-longer security of 7 years on a fixed rate
  
  
• Switching immediately to Avant Money's 10-year fixed rate (2.4% with no cashback) will leave you worse off by about €2,160 over the next 3 years – but with the even-longer security of 10 years on a fixed rate
  
  
• Switching immediately to Finance Ireland's 10-year fixed rate (2.4% with no cashback) will leave you worse off by about €2,160 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 Avant Money's "One Mortgage" (a 2.4% fixed rate with no cashback) will leave you worse off by about €2,160 over the next 3 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 13 years)

These savings estimates use for comparison the scenario of immediately breaking and re-fixing with KBC at the 2.25% 3-year rate in order to "reset the clock". 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 (and it might be impossible to switch if your financial situation has deteriorated).

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 (again, subject to certain conditions).

Note that over a four-year horizon (as opposed to the three years used in the above estimates), Avant's 4-year rate becomes better value than AIB's 5-year rate – because the lower interest rate more than offsets the AIB cashback.

Excellent Paul, thank you. KBC confirmed today that breakage fee is 0.
I am half tempted to stick with them and fix for 10 years at 2.8%. Am I crazy?
Could shorten term a little which should offset the increase in interest rate somewhat? So going from 13.5 years to 12.5 years at 2.8.
Am quite busy at the moment (and annoyed I didn't switch to Avant in Feb!!) so staying with KBC (BOI) long-term seems like a good option. It is either break and fix again for 3 years at 2.25% or go long term with 10 years at 2.8. The middle option of 5 years at 2.4% doesn't appeal to me.
Logic is that I have the certainty of a long-term fixed rate of 2.8% for less than 50 extra a month. The 10 year fixed with KBC is better to me than the 2.4% with Avant or Finance Ireland over the next 3 years. More expensive for the remaining 7 but still not bad.
After the ten years will only have about 3 years left.

Is the break fee likely to be significantly higher to break early from a 10 year term?

 

[Lucan22]

Your break fee should be around €760 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 green fixed rate (2.35% with €6,060 initial cashback and 2% monthly cashback) will save you about €6,500 over the next 3 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).
  • These concerns are not relevant to you if you think it is quite likely that you will be moving home in a few years (since you will need a new mortgage at that point anyway)
  
  
• Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €4,800 over the next 3 years
  
  
• Switching immediately to Haven's 3-year fixed rate (2.35% with €5,000 cashback) will save you about €4,700 over the next 3 years
  
  
• Switching immediately to AIB's 5-year green fixed rate (2.15% with €2,000 cashback) will save you about €3,480 over the next 3 years
  • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)
  • And for the same reason it is quite likely that there will be no break fee if you break out of this rate in, e.g., 3 years' time when you move
  
  
• Switching immediately to Haven's 7-year fixed rate (2.65% with €5,000 cashback) will save you about €2,060 over the next 3 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Avant Money's 7-year fixed rate (2.45% with no cashback) will leave you worse off by about €1,220 over the next 3 years – but with the even-longer security of 7 years on a fixed rate
  
  
• Switching immediately to Avant Money's 10-year fixed rate (2.6% with no cashback) will leave you worse off by about €2,540 over the next 3 years – but with the even-longer security of 10 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 €2,980 over the next 3 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.
  
  
• Switching immediately to Bank of Ireland's 3- or 5-year fixed rate (3.0% and you would get the 1% (€3,300) cashback in August 2023) will leave you worse off by about €1,440 over the next 3 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 August 2023 – 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 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 you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move (again, subject to certain conditions).

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 €7,800 in three 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.

If you think there is a reasonable or strong possibility that you really will move in the next 2 to 3 years, you should probably either fix for 5 years or less, or choose one of Finance Ireland's 10-year or longer fixed rates. That is because Finance Ireland's 10-year and longer fixed rates will waive or refund any break fee when you move, and will allow you to keep the same interest rate even after you move (subject to certain conditions), which might appeal to you. (Note that you'll still have to pay legal and valuation fees when moving, and any extra amount you borrow in order to buy your new place will attract whatever interest rate Finance Ireland are offering at that time.) Ultimately, though, it's your decision.

If you want savings estimates for longer-term fixed rates, let me know.

Thanks a lot for this. The BOI breakage fee is €437 on May 18th.

 

[Paul F]

• Current lender: KBC
• Outstanding mortgage balance (how much you still owe): 260k
• Approximate value of your property: 460K
• The date you started your fixed-rate mortgage (month and year): have split mortgage ..approx 30% is on 3.9 variable (18yrs remain), remainder is tracker at 2.2% (12yrs remain)
• How many years you fixed for: n/a
• Your current mortgage interest rate: as above
• Your current monthly repayment (excluding any overpayments): 2,090
• Your property's BER (Building Energy Rating) – check it here or estimate it if necessary: C1
• 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?

Just to clarify, the split mortgage is a result of selling our first home and retaining the tracker. Additional borrowed money was borrowed on a variable rate.

Because your BER is C1, you are not eligible for "green" mortgages.

Because you are on a variable-rate mortgage, you do not have to pay a break fee.

All of the below savings estimates assume that you take out a mortgage with a term of 14 years, and that the entire amount is fixed. (The new mortgage will not be a split mortgage and you will no longer have your tracker.)

• Switching immediately to Permanent TSB's 5-year fixed rate (2.55% with €5,199 initial cashback and 2% monthly cashback) will save you about €6,480 over the next 4 years
  • The monthly repayment would be €1,842
  • 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 4-year fixed rate (1.95% with no cashback) will save you about €5,320 over the next 4 years
  • The monthly repayment would be €1,770
  
  
• Switching immediately to AIB's 4-year fixed rate (2.2% with €2,000 cashback) will save you about €5,040 over the next 4 years
  • The monthly repayment would be €1,800
  
  
• Switching immediately to Haven's 5-year fixed rate (2.55% with €5,000 cashback) will save you about €4,800 over the next 4 years
  • The monthly repayment would be €1,842
  
  
• Switching immediately to Haven's 7-year fixed rate (2.65% with €5,000 cashback) will save you about €3,860 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • The monthly repayment would be €1,854
  
  
• Switching immediately to Avant Money's 5-year fixed rate (2.15% with no cashback) will save you about €3,480 over the next 4 years
  • The monthly repayment would be €1,794
  
  
• Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will save you about €2,540 over the next 4 years – but with the even-longer security of 7 years on a fixed rate
  • The monthly repayment would be €1,806
  
  
• Switching immediately (the entire mortgage balance, both the tracker and the 3.9% variable part) to KBC's 5-year fixed rate (2.4% with no cashback) will save you about €2,500 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 €1,824
  • You would no longer have your tracker in this scenario
  • Note that if you decide to do this, your mortgage will soon move onto Bank of Ireland's books, and they discriminate between new and existing customers, i.e., their best rates are not available to existing customers
  • For example, if you were an existing Bank of Ireland customer, the best rate you would be able to switch to today is 3%
  • So if you switch to this KBC offer now, you will probably not be eligible to switch to one of Bank of Ireland's 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 10-year fixed rate (2.4% with no cashback) will save you about €1,160 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,824
  
  
• Switching immediately to Finance Ireland's 10-year fixed rate (2.4% with no cashback) will save you about €1,160 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,824
  • 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 2.4% fixed rate with no cashback) will save you about €1,160 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (14 years)
  • The monthly repayment would be €1,824
  
  
• Switching immediately to KBC's 10-year fixed rate (2.85% with no cashback) will leave you worse off by about €1,700 over the next 4 years – but with the even-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).
  • The monthly repayment would be €1,879
  • You would no longer have your tracker in this scenario
  • The same warnings as above regarding higher Bank of Ireland rates in the future apply

These savings estimates use for comparison the scenario of staying on the current arrangement with KBC and assume that its rates (both the tracker rate and 3.9% variable rate) don't change between now and May 2026 (which is very 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.

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 (again, subject to certain conditions).

The products listed above are not your only options. For example, KBC may let you fix the variable part at a better rate, e.g., fix for 3 years at 2.25%, or fix for 5 years at 2.4%. You would still have your tracker but of course its rate could rise at any point in the future.

Ultimately, though, its your decision. Make sure you understand all of the consequences.

Out of curiosity, why is the variable part of your mortgage at such a high interest rate? KBC's current variable rates are between 3.0% and 3.3%, depending on your loan-to-value (LTV) bracket.

 

[Paul F]

I am half tempted to stick with them and fix for 10 years at 2.8%. Am I crazy?

KBC's 10-year fixed rate is 2.85%, not 2.8%. I've updated my post with the savings/cost estimate for switching to that rate:

• Switching immediately to KBC's 10-year fixed rate (2.85% with no cashback) will leave you worse off by about €2,800 over the next 3 years – but with the even-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).
  • The monthly repayment would be €1,205
  • The same warnings as above regarding higher Bank of Ireland rates in the future apply

Over ten years, the KBC 10-year rate will cost you an extra €3,600 compared to the Avant or Finance Ireland 10-year 2.4% fixed rate (and that's after allowing for the fact that a switch to Avant or Finance Ireland involves fees). So, is the convenience of re-fixing with KBC worth €3,600 to you?

Could shorten term a little which should offset the increase in interest rate somewhat? So going from 13.5 years to 12.5 years at [2.85].

If you shorten the term, your monthly payment will increase, not decrease.

Is the break fee likely to be significantly higher to break early from a 10 year term?

Breaking out of a standard 10-year fixed rate (e.g., KBC's 10-year fixed rate) can sometimes be very expensive. It depends on what happens to interbank rates in the future.

But as I said before, 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 (again, subject to certain conditions).

Those two lenders also put caps on the break fees they charge, in case you are paying off your mortgage early but not trading up.

 

[Athena]

I’m trying to decide whether to break early and fix the interest rate again. I am looking at adding an extension but I’m unsure how long off that will be with the current price hikes and difficulty getting a builder. Thanks for any advice.

Current lender - Bank of Ireland
Outstanding mortgage balance (how much you still owe) €146,232
Approximate value of your property - €300,000
The date you started your fixed-rate mortgage (month and year) March 2018
How many years you fixed for - 5 years
Your current mortgage interest rate - 3%
Your current monthly repayment (excluding any overpayments) €905.60
Your property's BER (Building Energy Rating) – A3
Are you due to get extra cashback from your current lender in the future - No

 

[twelve]

@twelve Are you saying you are on a variable rate? PTSB don't have a 2.3% variable rate.

Your figures also imply that there are 21 years left on your mortgage. Can you check everything again?

Yeah sorry for confusion, it's a "mover" tracker, currently paying 2.3% on that. Just double checked, theres 19 years (+ couple months) left on there.