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

Thanks Paul. Yes I'd like to lock it in for a few years, and Haven or Avant look good options, don't know if i'm brave enough for the EBS one.

The reason I haven't switched to date, or thought about switching till now, is that getting the mortgage in the first place was a headache, even though we comfortably met the criteria. It may be because it was a self-build. dealing with the legal side also would drain you. So I've been hesitant.

Avant don't do self-build mortgages, do you know if switching of mortgage a self-build is an option for them? I can call them of course if you don't know off hand.

And a final question - the process seems to have streamlined in recent years, are all banks much the same in terms of the ease of switching? This would be a big factor for me, especially between Havan and Avant.

Great site, I'm mostly reading the advice shared to others in multiple sections but the off time I post the support is super, fair play.
 
I don't know, sorry. Probably best to talk to a broker who deals with Avant.

Some people here have spoken highly of www.doddl.ie as an Avant broker. They make it easy to upload docs. If they deal with Haven too, that's a bonus for you.

Many of the lenders seem slow when it comes to processing switcher mortgages. But it's nowhere near as stressful as getting a mortgage the first time because there isn't really a deadline.
 
Thanks, if i get an answer to that question I'll let you all know.
 
Hi Paul, thanks for this:

Current lender: Ulster Bank
Outstanding mortgage balance: 257,375.62
Approximate value of your property: 437,983 (UB estimate)
The date you started your fixed-rate mortgage (month and year): Sept 2021
How many years you fixed for: 4
Your current mortgage interest rate: 2.6
Your current monthly repayment (excluding any overpayments): 1158.07
Your property's BER (Building Energy Rating) – estimated if necessary: D2
Cashback: none due
 
@BlueBlueBlue What year did you start your fixed rate? Did you really mean Sept 2021? UB's 4-year rate hasn't been 2.6% for quite a long time.
 
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BlueBlueBlue said:
Hi @Paul F , thanks you're right it was 2020, and is 2.6
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Your break fee should be zero, but confirm it with Ulster Bank (and please post it here when you receive it).

Switching to Avant's 1.95% rate fixed for up to 7 years will save you about €3,000 over the next five years (versus switching immediately to Ulster Bank's 2.2.% 5-year fixed rate), and that's after accounting for fees and cashback. Of course, if you decide to stay with UB and switch to their 2.2% rate, you will probably have to switch again in a few years, at which point interest rates might be higher.

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

Note: you will need to get a valuation of €429k or higher (or make an overpayment) to be eligible for the 1.95% rate.
 
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Thanks for this - I spoke to Ulster Bank today and they told me there would be a break fee but couldn't advise what it will be on the call. They are writing out and I will post back when I receive it. Can I ask why you think it should be zero?
 
BlueBlueBlue said:
Thanks for this - I spoke to Ulster Bank today and they told me there would be a break fee but couldn't advise what it will be on the call. They are writing out and I will post back when I receive it. Can I ask why you think it should be zero?
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The break fee depends on:
  • Your outstanding balance
  • How long is left on the fixed-rate period
  • The change in interbank interest rates from when you fixed to now
As interbank interest rates rise, the break fee falls (all other things being equal) – and interbank interest rates having been rising quite a lot lately.
 
Hi I recently enquired with BOI to switch to a lower rate from 2.9% Our house is A2 rated and was looking to switch to a BOI green mortgage of 2% They told me the break out fee would be €139 but that the lower rates are for new customers only and they couldn’t offer anything better than 2.9%. Any advice please as this doesn’t seem right. All details below. Thanks.
  • Current lender: BOI
  • Outstanding mortgage balance (how much you still owe) 309,822.34
  • Approximate value of your property: 550000
  • The date you started your fixed-rate mortgage (month and year) March 2019
  • How many years you fixed for: 5
  • Your current mortgage interest rate: 2.9%
  • Your current monthly repayment (excluding any overpayments): €1385.53
  • Your property's BER (Building Energy Rating) – 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 3,300 after 5 years so another 2 years to wait
 
Is there a way to keep track of interbank interest rate rises? It seems to be a key factor in the calculation.
 
Bank of Ireland discriminate between new and existing customers. That's why they are not popular on this forum.

Your break fee should be zero, but confirm it with BOI (and please post it here when you receive it).

You could switch to Haven's 2.0% green rate, fixed for 4 years. You will get €2,000 cashback. You will be better off by about €11,300 in four years' time (versus staying on a 2.9% rate with BOI), and that's after accounting for fees and cashback.

If you're prepared to settle for smaller savings in exchange for a longer fixed rate, switching to Avant's 1.95% rate lets you fix for up to 7 years. You will be better off by about €9,900 in four years' time (versus staying on a 2.9% rate with BOI), and that's after accounting for fees.

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 €14,300 in four years' time (versus staying on a 2.9% rate with BOI).

Nobody knows for sure if Haven will allow you to do this, so you might be stuck on the 2.35% rate, which isn't bad considering the €5k cashback.

It doesn't seem worth staying with BOI for another two years to get the €3,300 cashback.
 
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odyssey06 said:
Is there a way to keep track of interbank interest rate rises? It seems to be a key factor in the calculation.
Click to expand...
I use these rates to estimate the interbank rates.

If there are approximately 2 years left on your fixed rate, you look at the 2-year rate to see the recent trends, and similarly for other time periods. (As the rates rise, your break fee falls, and vice versa.)

I won't get into the break fee calculation here. If you want to know more, see this thread.
 
Thank for your advice Paul. Appreciate it.
 
Hi Paul,

Firstly thanks for a really informative thread,

I’m looking at the option of moving with my preference being for a longer fixed term and possibly reducing the term to 10 years (159 v 120 months).

Your advice would be greatly appreciated,

  • PTSB
  • €220,500
  • €900K
  • Oct 2019
  • 5years
  • 2.75%
  • €1657
  • C3
  • Yes 2% cashback monthly - €34
Thanks in advance.
 
Andy Cole said:
Thank for your advice Paul. Appreciate it.
Click to expand...
The savings estimates I gave should actually be reduced by €3,300. That's because I forgot to include the extra 1% cashback you would get if you were to stay with BOI. Still, switching very soon seems like a very good choice in your circumstances.
 
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JaaaaaD said:
I’m looking at the option of moving with my preference being for a longer fixed term and possibly reducing the term to 10 years (159 v 120 months).
Click to expand...
Your break fee should be zero, but confirm it with PTSB (and please post it here when you receive it).

You could switch to Avant's 1.95% rate, fixed for 7 years. You would save about €7,350 over the next 7 years (versus staying with PTSB and moving onto their 2.9% rate when the current fixed rate is up), and that's after accounting for fees and the monthly cashback. And that's assuming that PTSB are even offering a 2.9% rate in two and a half years – it could be higher (or lower, but more likely higher).

If you instead switched to Avant's 2.1% rate fixed for 10 years, you would save about €5,550 over the next 7 years (with the same assumptions as above).

I don't really see the need to shorten your mortgage term: Avant allow you to overpay 10% of the outstanding balance each year without penalty. Each time you do so, you have the choice (I think) to shorten the term or lower your monthly repayments while keeping the term the same. The latter has the advantage of lowering the monthly payment that you are contractually obliged to make, giving you more financial breathing room, but you are still entitled to keep overpaying if you want to.

If you play around with the "Loan Term" field in this calculator, you can see the effect of different overpayments. It might also help you to decide between the 1.95% and the 2.1% rate (by thinking about how much you want to overpay by and seeing what it does to the term).

Note that with Avant you can only make two overpayments a year, so you'll need to save them up and pay them as one or two lump sums.
 
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Hi @Paul F , coming back to confirm no break fee to leave ulster bank for another lender.
 
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