The Oggster
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@The Oggster Did you get a chance to check this?
- The date you started your fixed-rate mortgage (month and year): I think it was January 2019. I will check later and update if necessary
Because you are on a variable-rate mortgage, you do not have to pay a break fee.
- Current lender: AIB
- Outstanding mortgage balance (how much you still owe) 232,000
- Approximate value of your property 650000
- The date you started your fixed-rate mortgage (month and year) currently on variable rate
- How many years you fixed for n/a
- Your current mortgage interest rate. 2.75%
- Your current monthly repayment (excluding any overpayments) €2030
- 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
See this thread for the overpayment policy of the various lenders. Note that even if a lender does not allow overpayments without penalty, that penalty can sometimes be small or even zero. (It depends in part on the change in interbank rates between when you fix and when you overpay, which is hard to predict.)Would like to be able to overpay.
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).
- Current lender: KBC
- Outstanding mortgage balance (how much you still owe): €295,000
- Approximate value of your property: €650,000
- The date you started your fixed-rate mortgage (month and year): December 2020.
- How many years you fixed for: 2
- Your current mortgage interest rate: 2.25% (that's including 0.2% discount)
- Your current monthly repayment (excluding any overpayments): €1408
- 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? 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 Avant Money's 4-year fixed rate (1.95% with no cashback) will save you about €3,260 over the next 4 years
- Switching immediately to AIB's 4-year fixed rate (2.15% with €2,000 cashback) will save you about €3,080 over the next 4 years
- Switching immediately to Haven's 5-year fixed rate (2.55% with €5,000 cashback) will save you about €1,600 over the next 4 years
- Switching immediately to Avant Money's 5-year fixed rate (2.15% with no cashback) will save you about €1,040 over the next 4 years
- Switching immediately to Haven's 7-year fixed rate (2.65% with €5,000 cashback) will save you about €480 over the next 4 years – but with the longer security of 7 years on a fixed rate
- Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will leave you worse off by about €80 over the next 4 years – but with the even-longer security of 7 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 €420 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 (2.4% with no cashback) will leave you worse off by about €1,740 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 (2.4% with no cashback) will leave you worse off by about €1,740 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 2.40% 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 2.40% 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.
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).
If you want savings estimates for longer-term fixed rates, let me know.
Switching immediately to AIB's 4-year fixed rate (2.15% with €2,000 cashback) will save you about €1,380 over the next 3 years (versus immediately breaking out of your current KBC rate and re-fixing with them for 3 years at 2.25%).I am trying to decide on re-fixing with KBC for 3 years on the same rate now or going with AIB 4 year 2.15%.
Just can't decide.
In your particular case you are probably more likely to have a break fee/a larger break fee in 2 or 3 months' time if you re-fix now for 2 or 3 years (versus staying on your current rate). I.e., staying on your current rate is probably the better way to try to have a zero or small break fee in a few months (but there are no guarantees).If I fix for 3 years with KBC now (for security) would I face a big break fee in say 2 or 3 months time if I decide to switch bank?
This is my thinking also. I was working with a broker for the Avant 1.95% 7 year rate. Then they raised the rate and I wouldnt make the July cut-off. I would be really pissed if the same thing happened when applying for the AIB 4 year. It takes one email to fix with KBC for 3 years.On the other hand, AIB or KBC (or any other lender) could raise their rates at any time, which is a reason to consider breaking and re-fixing now with KBC. You could still pursue the switch to AIB after doing this (if you want to), but there might be a break fee when you finally switch to AIB and/or AIB might have put up their rates by then.
Thanks Paul. Really appreciate this.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:
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?
- 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
If you shorten the term, your monthly payment will increase, not decrease.
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.
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). In your case, it is extra volatile because there is so long left on your fixed rate.
Of course, if you decide to stay with KBC and switch to their 2.4% rate, you might 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. Unless you are then in a position to pay off a large part of your remaining balance, which would mean that higher interest rates wouldn't matter as much.
- Switching immediately to KBC's 5-year fixed rate (2.4% with no cashback) will save you about €2,750 over the next 4 years versus staying on your current rate – and is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed), and there are no fees, except possibly a valuation fee (€150)
These savings estimates use for comparison the scenario of doing nothing, and assume that your monthly repayment continues at €660, i.e., you continue the €100/month overpayment. The estimates also account for fees and cashback.
- Switching immediately to Haven Mortgages Limited's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €4,860 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 €4,460 over the next 4 years
- Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €3,020 over the next 4 years
- Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will save you about €2,440 over the next 4 years
For any of the above products (rates), you may incur a break fee if you pay off a large part of the mortgage before the fixed term expires, so think about when you might be making this large payment and choose the product with the most-appropriate fixed term for your needs.
Note: the Avant savings estimates assume that you are not eligible for the €1,500 cashback. To be eligible, the switch to Avant has to be underway before the end of March and you must use a broker who is an Avant "Gold Partner". I don't know what "underway" means but if you are inclined to try to beat the deadline you could talk to an Avant Gold Partner as soon as possible and see if it is possible.
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).Thanks
- Current lender: KBC
- Outstanding mortgage balance (how much you still owe): €285k
- Approximate value of your property: €440k
- The date you started your fixed-rate mortgage (month and year): Dec 2020
- How many years you fixed for: 3
- Your current mortgage interest rate: 2.3%
- Your current monthly repayment (excluding any overpayments): €1,315
- Your property's BER (Building Energy Rating) – estimated if necessary: A2
- Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much and when?: No
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).
- Current lender: Ulster Bank
- Outstanding mortgage balance (how much you still owe): €208k
- Approximate value of your property: €430k
- The date you started your fixed-rate mortgage (month and year): June 2021
- How many years you fixed for: 2
- Your current mortgage interest rate: 2.2%
- Your current monthly repayment (excluding any overpayments): €914
- Your property's BER (Building Energy Rating) – estimated if necessary: Original one was G, current one unknown - property 100+ years old; had extension built which may have improved BER?
- 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
See this thread for information on the overpayments allowed by various lenders.Keen to make overpayments within 6 months, some extra cash would be handy in the short-term. Thanks in advance!
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).
- Current lender: KBC
- Outstanding mortgage balance (how much you still owe): 400,000
- Approximate value of your property: 650,000
- The date you started your fixed-rate mortgage (month and year): October 2018
- How many years you fixed for: 5 years
- Your current mortgage interest rate: 2.65%
- Your current monthly repayment (excluding any overpayments): 1,765.92
- Your property's BER (Building Energy Rating) – check it here or estimate it if necessary: C3
- 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
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