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

This was your original quote:

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

Current lender - BOI Outstanding mortgage balance (how much you still owe) - 602K Approximate value of your property - 850K The date you started your fixed-rate mortgage (month and year) July 2021 How many years you fixed for 5 years Your current mortgage interest rate 2.5% Your current monthly...
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jim said:
I rang ebs and they quoted me 2693.59 to break theyre going to post me a letter and ill confirm details when I receive that. Is there any way that they could be mistaken, i was really hooping it would be closer to zero! : )
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That's seems very high but it's not totally impossible. Could you dig out the exact date you started your fixed rate with them?
 
jim said:
I rang ebs and they quoted me 2693.59 to break theyre going to post me a letter and ill confirm details when I receive that. Is there any way that they could be mistaken, i was really hooping it would be closer to zero! : )
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Paul F said:
That's seems very high but it's not totally impossible. Could you dig out the exact date you started your fixed rate with them?
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jim said:
Its the 24th June Paul. Thanks.
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That's a bit strange because 24 June is the same date as your original post on the thread:

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

Current lender - BOI Outstanding mortgage balance (how much you still owe) - 602K Approximate value of your property - 850K The date you started your fixed-rate mortgage (month and year) July 2021 How many years you fixed for 5 years Your current mortgage interest rate 2.5% Your current monthly...
www.askaboutmoney.com

Did EBS only put you on the fixed rate on 24 June?

Anyway, assuming they did, the break fee is probably right – in fact, it's lower than my updated estimate (€6,100). The relevant interbank interest rate was at a recent high just as you fixed and has since fallen, leading to the break fee. See this graph.

If the interbank interest rate falls further, the break fee will increase – and vice versa.

If you do switch to the EBS green rate, make sure to fight for the 1% cashback in 5 years (if you are still with EBS then). There is a strong argument that you are entitled to it, even if they say you aren't.

Key Post - EBS cash back does not apply to Green Mortgages?

Switching immediately to EBS's 4-year green fixed rate (2.1% and you would get the 1% (€2,400) cashback) will save you about €2,800 over the next 4 years. I am assuming that you would get the €2,400 cashback in January 2026, but you should check this with EBS (and get it in writing if they...
www.askaboutmoney.com
 
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@fjcie1 Because you are on a variable-rate mortgage, you do not have to pay a break fee.
  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €14,600 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 €13,740 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 4-year fixed rate (1.95% with no cashback) will save you about €12,980 over the next 4 years

  • Switching immediately to Avant Money's 5-year fixed rate (2.15% with no cashback) will save you about €11,280 over the next 4 years

  • Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will save you about €10,440 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • If Avant won't let you switch to them and you really want to fix for 7 years for some reason, you could consider Haven's 7-year fixed rate (2.65% with €2,000 cashback)

  • Switching immediately to Avant Money's 10-year fixed rate (2.4% with no cashback) will save you about €9,160 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • If Avant won't let you switch to them and you really want to fix for 10 years for some reason, you could consider KBC's 10-year fixed rate (2.85% with €3,000 cashback). You must apply by 15 July 2022 if you wish to switch to KBC. You would also have to apply for a current account with them by that date.
    • Or you could consider Haven's 10-year fixed rate (2.85% with €2,000 cashback)

  • Switching immediately to Avant Money's "One Mortgage" (a 2.5% fixed rate with no cashback) will save you about €8,300 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 30 years)

  • Switching immediately to Bank of Ireland's 5-year fixed rate (3.0% and you would get the 1% (€2,260) cashback) will save you about €7,760 over the next 4 years. And 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 (2.9% with no cashback) will save you about €4,880 over the next 4 years – but with the 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 Finance Ireland's 20-year fixed rate (3.0% with no cashback) will save you about €4,020 over the next 4 years – but with the longer security of 20 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 Bank of Ireland's 10-year fixed rate (3.3% and you would get the 1% (€2,260) cashback) will save you about €5,040 over the next 4 years – but with the 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).

  • Switching immediately to Finance Ireland's 25-year fixed rate (3.15% with no cashback) will save you about €2,720 over the next 4 years – but with the longer security of 25 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

These savings estimates use for comparison the scenario of staying on the variable rate with Bank of Ireland and assume that that rate doesn't change between now and July 2026 (which is very unlikely). You would get the Bank of Ireland €2,260 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.

You should call Bank of Ireland and tell them that you are planning to switch to another lender. Ask them what interest rates they will offer you to break and re-fix with them. Please post a summary of their response here.

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 50% so that you are eligible for the AIB green rate. (You are already eligible, in relation to LTV, for all of the other listed rates.) Your LTV estimate is 220.0k/450.0k = 48.9%. If you get a valuation of less than €440k, you will need to make a few more monthly mortgage payments and/or a lump sum overpayment to get the LTV below 50%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.

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).
 
Current lender: Ulster Bank
Outstanding mortgage balance: €189k
Approximate value of your property: €500k
The date you started your fixed-rate mortgage: October 2020
How many years you fixed for: 2 years, fixed until 31/12/22
Your current mortgage interest rate: 2.3%
Your current monthly repayment: €1,356
Your property's BER: C2
Cashback?: No
 
@dkieran 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. If it is higher than zero, please post it here when you receive it, including the date of the letter.

Note: you may receive two separate letters from Ulster Bank a few days apart, and their structure and wording can lead to confusion. Look for the line that says: "To break out of this fixed rate early, you would have to pay a fee of €X". That amount is your break fee. Ignore all other references to break fees.
  • Switching immediately to Avant Money's 4-year fixed rate (1.95% with no cashback) will save you about €1,140 over the next 4 years

  • Switching immediately to AIB's 5-year fixed rate (2.35% with €2,000 cashback) will save you about €500 over the next 4 years

  • Switching immediately to Ulster Bank's 4- or 5-year fixed rate (2.35% with no cashback) will leave you worse off by about €60 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 Permanent TSB'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 Permanent TSB customer, the best rate you would be able to switch to today is 3.0%
    • So if you switch to this Ulster Bank offer now, you will probably not be eligible to switch to one of Permanent TSB'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 €200 over the next 4 years

  • Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will leave you worse off by about €880 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • If Avant won't let you switch to them and you really want to fix for 7 years for some reason, you could consider Haven's 7-year fixed rate (2.65% with €2,000 cashback)

  • Switching immediately to Avant Money's 10-year fixed rate (2.4% with no cashback) will leave you worse off by about €1,880 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • If Avant won't let you switch to them and you really want to fix for 10 years for some reason, you could consider KBC's 10-year fixed rate (2.85% with €3,000 cashback). You must apply by 15 July 2022 if you wish to switch to KBC. You would also have to apply for a current account with them by that date.
  • Switching immediately to Avant Money's "One Mortgage" (a 2.4% fixed rate with no cashback) will leave you worse off by about €1,880 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 14 years)

  • Switching immediately to Ulster Bank's 7- or 10-year fixed rate (2.8% with no cashback) will leave you worse off by about €3,080 over the next 4 years – but with the 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

  • Switching immediately to Finance Ireland's 10-year fixed rate (2.9% with no cashback) will leave you worse off by about €5,240 over the next 4 years – but with the 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

These savings estimates use for comparison the scenario of switching to the 2.35% 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 2.35% rate in January 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.

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).

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).
 
Hi Paul F,

Thanks for your response and advice, very much appreciated.
 
Current lender: Ulster Bank
Outstanding mortgage balance: €346,000
Approximate value of your property: €660,000k
The date you started your fixed-rate mortgage: Sept 18
How many years you fixed for: 4 years, fixed until 30/09/22
Your current mortgage interest rate: 2.6%
Your current monthly repayment: €1,769.31
Your property's BER: ? No idea - was renovated since purchase.
Cashback?: No

Approx 9th Nov 2021, the break fee was 1933€ when requested.

Unsure of costs of UB 2.2% 5 year v Avant 2.25% 7 year (and possible time it will take to switch to Avant - broker sent doc last week to them for AIP)
 
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Current lender: Bank of Ireland
Outstanding mortgage balance: 189k
Approximate value of your property: 260k
The date you started your fixed-rate mortgage: October 2020
How many years you fixed for: 5 (To October 2025)
Your current mortgage interest rate: 3%
Your current monthly repayment: 750 approx
Your property's BER: C2
Are you due to get extra cashback from your current lender in the future: 2k in October 2025

Break fee was nil around 2 months ago when I called but have had this on the long finger since. Checked with PTSB and their 2.05% rate for 4 Yr would bring in a 95€ reduction per month, but with the valuation and solicitor fees this only seems to break even in Feb '24 and any gains after that are lost with the loss of cashback in October '25. The loan would be 2k lower too by October '25.

Is this a simple equation of willing to front up ~2k today to get ~2k greater equity in the home by Oct '25 and basically getting an extension of a fixed rate for around 9 months?
 
Taking out a mortgage for the first time.

Property - 750,000
mortgage - 675,000
Energy Rating - A2
  1. BOI - 1.9% green fixed for 4 year (35 year)
  2. AIB - 2.25% green fixed for 5 year (34 year)
I understand AIB will be much cheaper in the long run but I'd be paying 6000 EUR more with AIB for the fixed duration. any advise?
 
I'd go with the cheaper rate any day, especially in the early stages of the mortgage.
Be prepared to switch after 4 years.
Why not go with 34y on BOI mortgage if you can afford it?
 

Thanks very much Paul. Really appreciate your time here

In relation to this..
You should call Bank of Ireland and tell them that you are planning to switch to another lender.
They said they will only offer me 3% fixed and wouldn't tell me how much it would be to break. Said they could only tell me on the specific day. They didn't care I was switching either
 
fjcie1 said:
You should call Bank of Ireland and tell them that you are planning to switch to another lender.
They said they will only offer me 3% fixed
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It was worth a try. Maybe they only offer a discount to people with larger balances (who are more valuable to them). Maybe they read this thread!

fjcie1 said:
wouldn't tell me how much it would be to break. Said they could only tell me on the specific day.
Click to expand...
You are on a variable rate so there is no break fee for your current mortgage.

What they meant was that if you fixed at 3%, they can't tell you now what the break fee would be in the future – because it changes every day.
 
@DublinD Your break fee should be around €180 at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Ulster Bank (and please post it here when you receive it, including the date of the letter).

Note: you may receive two separate letters from Ulster Bank a few days apart, and their structure and wording can lead to confusion. Look for the line that says: "To break out of this fixed rate early, you would have to pay a fee of €X". That amount is your break fee. Ignore all other references to break fees.
  • Switching immediately to Permanent TSB's 5-year green fixed rate (2.35% with €6,919 initial cashback and 2% monthly cashback) will save you about €5,000 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 2.8%
    • 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).
    • You would need a BER cert with a rating of B3 or better to be eligible for this rate. The BER assessment cost is not included in the savings estimate. There is no guarantee that a BER assessment will come back with the rating that you need.

  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €3,260 over the next 4 years
    • You would need a BER cert with a rating of B3 or better to be eligible for this rate. The BER assessment cost is not included in the savings estimate. There is no guarantee that a BER assessment will come back with the rating that you need.

  • Switching immediately to Avant Money's 4-year fixed rate (1.95% with no cashback) will save you about €1,880 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 €1,300 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)
    • You would need a BER cert with a rating of B3 or better to be eligible for this rate. The BER assessment cost is not included in the savings estimate. There is no guarantee that a BER assessment will come back with the rating that you need.

  • Switching immediately to AIB's 4-year fixed rate (2.2% with €2,000 cashback) will save you about €660 over the next 4 years

  • Switching immediately to Ulster Bank's 5-year fixed rate (2.2% with no cashback) will save you about €100 over the next 4 years. 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

  • Switching immediately to Avant Money's 5-year fixed rate (2.15% with no cashback) will leave you worse off by about €720 over the next 4 years

  • Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will leave you worse off by about €2,020 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • If Avant won't let you switch to them and you really want to fix for 7 years for some reason, you could consider Haven's 7-year fixed rate (2.65% with €5,000 cashback)

  • Switching immediately to Avant Money's 10-year fixed rate (2.4% with no cashback) will leave you worse off by about €3,980 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • If Avant won't let you switch to them and you really want to fix for 10 years for some reason, you could consider Haven's 10-year fixed rate (2.85% with €5,000 cashback)

  • Switching immediately to Avant Money's "One Mortgage" (a 2.5% fixed rate with no cashback) will leave you worse off by about €5,300 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 21 years)

  • Switching immediately to Ulster Bank's 7- or 10-year fixed rate (2.8% with no cashback) will leave you worse off by about €7,740 over the next 4 years – but with the 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

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.9% with no cashback) will leave you worse off by about €10,540 over the next 4 years – but with the 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 Finance Ireland's 20-year fixed rate (3.0% with no cashback) will leave you worse off by about €11,860 over the next 4 years – but with the longer security of 20 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 2.2% 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 2.2% rate in October 2022 – it could be higher (or lower). The estimates also account for any fees (break fee, solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

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).

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 (assuming you have a BER of B3 or better). If it works, you will be better off by about €6,260 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.

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 apply simultaneously to two or more lenders for approval in principle (AIP).
 
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Hi Paul,

Would really appreciate your advise on my situation. Am currently on maternity leave (due back in Sept) so money is tight to switch lenders (to pay solicitor fees etc.) but I'm sure it will be worth it in the long run. Any reduction in the monthly payment would also really help us but again with 3 small children I am keen to look at the long game/big picture as stability is very important.

  • Current lender – KBC
  • Outstanding mortgage balance (how much you still owe) €302,000
  • Approximate current value of your property €500k
  • The date you started your fixed-rate mortgage (month and year) Dec 2018
  • How many years you fixed for 5 years
  • Your current mortgage interest rate 2.7%
  • Your current monthly repayment (excluding any overpayments) €1345
  • 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 (monetary amount) and when? None
Thanks!
Ciara
 
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