Hi @Paul F, that's a brilliant summary. Thanks for providing that.@Gabe77
- Switching immediately to AIB's 5-year fixed rate (2.35% with €2,000 cashback) will save you about €240 over the next 3 years
- Switching immediately to KBC's 3-year fixed rate (2.25% with no cashback) will leave you worse off by about €20 over the next 3 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed – just an updated valuation).
- 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 4-year fixed rate (1.95% with no cashback) will leave you worse off by about €80 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 €660 over the next 3 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed – just an updated valuation).
- The same warnings as above regarding higher Bank of Ireland rates in the future apply
- Switching immediately to Avant Money's 5-year fixed rate (2.15% with no cashback) will leave you worse off by about €920 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 €1,360 over the next 3 years – but with the 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 €2,000 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 (2.4% with no cashback) will leave you worse off by about €2,000 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
- Switching immediately to Avant Money's "One Mortgage" (a 2.5% fixed rate with no cashback) will leave you worse off by about €2,440 over the next 3 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 17 years)
- Switching immediately to KBC's 10-year fixed rate (2.85% with no cashback) will leave you worse off by about €2,600 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 – just an updated valuation).
- The same warnings as above regarding higher Bank of Ireland rates in the future apply
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 April 2024 – 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.
If you consider a "horizon" of 4 years or longer, the savings from switching to another lender become bigger (compared to staying with KBC).
The savings estimates also assume that you consider €885 to be your normal monthly payment to KBC. This means that your mortgage (whether with KBC or with one of the above lenders) will be paid off in about 17 years.
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).
Bear in mind that interest rates could rise between now and the time that you complete any switch.
I haven't heard of that before. Note that the above savings estimates do not account for that fee.
Edit: Can you confirm that you mean that KBC paid your solicitor's fees when you took out the mortgage?
@Gabe77 Note that the savings estimates I gave are over the next three years.The aib 5 year mortgage might be worth considering with the expectation that rates will go up and I could be on a higher rate in 2024 if I don't switch now
Thanks a mil for your reply @Paul F . I've got two further questions. I noted on PTSB's terms page that '4 year fixed home loan new business rates' doesn't qualify for the 2% cashback. I assume by new business they mean new customer? If that's the case then it seems less attractive without that carrot.
Yes, "new business" means any new PTSB mortgage customer. Permanent TSB's 4-year fixed rate (2.05%) does not qualify for the 2% cashback on drawdown but you would still qualify for the "2% of your monthly payments back in cash" offer. The lack of cashback on drawdown is the reason why the interest rate (2.05%) is so much lower than PTSB's other interest rates.I noted on PTSB's terms page that '4 year fixed home loan new business rates' doesn't qualify for the 2% cashback. I assume by new business they mean new customer? If that's the case then it seems less attractive without that carrot.
I assume legal fees of €1,300 (including VAT and outlays) – see the links to the three threads about solicitors in this post. And I assume a valuation fee of €150 or €185, depending on the lender.Also, when you say you have allowed for legal and other fees in your calculations, what figure are you using? I assume it's an approximation?
@dubl-u07 What is the monetary amount of the 1% cashback?Outstanding cashback due: 1% at 5 year mark
@marctobin 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): €282,000
Approximate value of your property: €525,000
The date you started your fixed-rate mortgage (month and year): October 2019
How many years you fixed for: 5 years
Your current mortgage interest rate: 2.65%
Your current monthly repayment (excluding any overpayments): €1549
Your property's BER (Building Energy Rating) – check it here or estimate it if necessary: E2
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 are differing opinions on this site on whether or not BOI will continue to allow the 10% penalty-free overpayment. See this thread:I would like to break the current fix, reduce the amount of the balance by giving a lump sum higher than the 10% allowed, and renew a new 5 year fixed at 2.40%. If so, does BOI have to honor it when the time comes? I wonder if BOI only has to honor mortgages signed before the deal between KBC and BOI....
Fantastic explanation, thanks a million Paul, appreciate this.@marctobin 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).
The following estimates assume that you first make a lump sum overpayment of €30k to KBC and keep your monthly repayments the same. This will shorten your mortgage term to approximately 17 years. You may not have to break and re-fix to make this overpayment, but doing so would "reset" your 10% overpayment allowance if you are staying with KBC. If you are moving to another lender, you can simply apply for a mortgage of €252k and pay the difference (~€30k) when you redeem the KBC mortgage.
- Switching immediately to AIB's 4-year fixed rate (2.15% with €2,000 cashback) will save you about €4,280 over the next 4 years
- Switching immediately to Avant Money's 4-year fixed rate (1.95% with no cashback) will save you about €4,080 over the next 4 years
- Switching immediately to Haven's 5-year fixed rate (2.55% with €5,000 cashback) will save you about €3,580 over the next 4 years
- Switching immediately to Haven's 7-year fixed rate (2.65% with €5,000 cashback) will save you about €2,640 over the next 4 years – but with the longer security of 7 years on a fixed rate
- Switching immediately to AIB's 5-year fixed rate (2.35% with €2,000 cashback) will save you about €2,440 over the next 4 years
- Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will save you about €1,320 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 (2.4% with no cashback) will save you about €1,260 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 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 €60 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 €60 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
- Switching immediately to Avant Money's "One Mortgage" (a 2.5% fixed rate with no cashback) will leave you worse off by about €1,000 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 17 years)
- Switching immediately to KBC's 10-year fixed rate (2.85% with no cashback) will leave you worse off by about €2,920 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 same warnings as above regarding higher Bank of Ireland rates in the future apply
These savings estimates use for comparison the scenario of switching to the 2.4% 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 2.4% rate in October 2024 – 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.
You must take out a mortgage of at least €250k to be eligible for some of the above rates (AIB, Haven).
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).
Bear in mind that interest rates could rise between now and the time that you complete any switch.
There are differing opinions on this site on whether or not BOI will continue to allow the 10% penalty-free overpayment. See this thread:
UB & KBC mortgage buyers must honour rates. What about Ts&Cs?
My understanding is that the buyers of the mortgage books of Ulster Bank and KBC must honour whatever interest rate you're on while it lasts. So if you have a tracker, you must keep your tracker at the same margin. If you have a fixed rate you get to keep the same rate until the end of the...www.askaboutmoney.com
Remember also that overpaying your mortgage may not be the best use of your money. Your priorities should usually be:
in approximately that order.
- Paying off expensive debt (credit cards, personal loans, car loans, etc.)
- Building up an emergency fund in a savings/current account (3 to 6 months' living expenses)
- Saving money for any expenses you will have over the next few years (kids; childcare; adult children going to college, etc.)
- Maxing out your pension contributions (very large tax relief is given)
- Overpaying your mortgage
excellent, thanks a lot!Yes, "new business" means any new PTSB mortgage customer. Permanent TSB's 4-year fixed rate (2.05%) does not qualify for the 2% cashback on drawdown but you would still qualify for the "2% of your monthly payments back in cash" offer. The lack of cashback on drawdown is the reason why the interest rate (2.05%) is so much lower than PTSB's other interest rates.
It is good value but only over the next 4 years. After that you will not be eligible to switch to one of their low rates and you will end up on a higher interest rate (because PTSB discriminate between new and existing customers). 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).
I assume legal fees of €1,300 (including VAT and outlays) – see the links to the three threads about solicitors in this post. And I assume a valuation fee of €150 or €185, depending on the lender.
Call Ulster Bank mortgage section and ask them to send you out a break fee quote (it will almost certainly be zero) and a rate options sheet. When that arrives (provided the break fee is zero), tick the box for the 2.2% 2-year fixed rate, sign it and send it back. Maybe add a note to it telling UB not to carry out this re-fix if the rate has increased by the time they get the completed form from you.Does anyone know if it's possible to get your fixed rate extended?
Currently On 2.2% with ulster bank until March 2024, I signed up around Feb this year,but see on their website that the same one is available until Sept 2024 now. Would they extend mine to Sept 2024 if I asked?
Or would I have to go through the whole process of breaking out and singing up again.
@digger988 Your break fee should be around €20 at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Permanent TSB (and please post it here when you receive it, including the date of the letter).Current lender: PTSB
Outstanding mortgage balance: €236k
Approximate value of your property: €350k
The date you started your fixed-rate mortgage: July 2019
How many years you fixed for: 3
Your current mortgage interest rate: 3.1%
Your current monthly repayment: €1076
Your property's BER: D1
Cashback?: 2% cashback when drawn down and 2% cashback on monthly repayments
Some lenders allow you to make large overpayments on your fixed-rate mortgage without penalty – see this thread for details. (Alternatively, you could shorten the term of your new mortgage but you would be obliged to continue making the higher monthly repayment each month.)Was thinking i should be bringing down the term (27) by increasing monthly repayments. Higher salary since drawdown.
@dubl-u07 Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Bank of Ireland (and please post it here when you receive it, including the date of the letter).
- Current lender: Bank of Ireland
- Outstanding balance: just shy of €352k
- Approximate value of your property: €462k
- Date started: August 2018
- Fixed for: 5 years
- Current interest rate: 3%
- Current monthly repayment: around €1,456
- BER: A3
- Outstanding cashback due: 1% [€3,780] at 5 year mark
@dubl-u07 Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Bank of Ireland (and please post it here when you receive it, including the date of the letter).
- Switching immediately to Permanent TSB's 5-year green fixed rate (2.35% with €7,039 initial cashback and 2% monthly cashback) will save you about €11,720 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 €10,460 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 €8,420 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 5-year fixed rate (2.55% with €5,000 cashback) will save you about €5,940 over the next 4 years
- Switching immediately to Haven's 7-year fixed rate (2.65% with €5,000 cashback) will save you about €4,580 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 (2.45% with no cashback) will save you about €2,260 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 €1,382
- Switching immediately to Haven's 10-year fixed rate (2.85% with €5,000 cashback) will save you about €1,820 over the next 4 years – but with the even-longer security of 10 years on a fixed rate
- Switching immediately to Avant Money's 10-year fixed rate (2.6% with no cashback) will save you about €220 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 €1,409
- Switching immediately to Bank of Ireland's 5-year fixed rate (3.0% and you would get the 1% (€3,780) cashback) will leave you worse off by about €160 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
- Switching immediately to Bank of Ireland's 10-year fixed rate (3.3% and you would get the 1% (€3,780) cashback) will leave you worse off by about €4,300 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
- Switching immediately to Finance Ireland's 10- or 15-year fixed rate (3.15% with no cashback) will leave you worse off by about €7,340 over the next 4 years – but with the even-longer security of 10 or 15 years on a fixed rate
- This is the interest rate that will apply for loan offers issued after 24 June 2022
- This product has a benefit in relation to moving home in the future that is explained below
- And your interest rate (initially 3.15%) 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 3.0% rate with Bank of Ireland when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 3.0% rate in August 2023 – it could be higher (or lower). You would get the Bank of Ireland €3,780 future cashback in such a scenario, and the savings estimates account for this. 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 €13,460 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.
Bear in mind that interest rates could rise between now and the time that you complete any switch, so if you are thinking of switching you should probably apply simultaneously to two or more lenders for approval in principle (AIP).
EBS doesn't do a 10 y fixed@Paul F thanks so much for this, I really appreciate it! In anticipation of your reply I made a quick spreadsheet of my own comparing options, and found the exact Permanent TSB option you suggest came out on top for me too, accounting for the fees in maintaining an Explore account needed to get the monthly cashback component etc.; interestingly, EBS’ 5 year fixed rate at 2.75% with 3% cashback came out a close second for me (even better than their 2.1% 4 year “green” option, based on a 5 year comparison with maybe-too-pessimistic follow-on interest rate projections). Is there some reason I should avoid EBS altogether? I’m a Permanent TSB customer, but have never had a mortgage or loan with them; can I definitely still avail of their new business offers?
I requested info on the early exit fee from BOI today but they just said they’d have to have someone call me back. I’ll update with that figure whenever I get it, no problem.
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