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

Hi Paul, thanks for the incredibly comprehensive reply. I spoke to Bank of Ireland and they have confirmed the break fee is 0 at the moment, hopefully that doesn't change. At what point of the process is the break fee "locked in"? They also confirm the fixed rate term started at the first drawdown in January 2020 so it will expire in January 2025 I think. I'll take your advice and apply to Haven and PTSB at the same time and see how it goes. Will post back here if successful.
 
ConorPM said:
At what point of the process is the break fee "locked in"?
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Most lenders will not let you "lock in" a particular interest rate when you are in the middle of the switching process. For example, I know that AIB reserve the right to change the interest rate at any time right up to the point of drawdown.

One exception was Avant when they increased many of their rates a few months ago: anyone who had started their switcher application by 13 May had until 15 July to drawdown at the old rates.

Avant to raise 5-20 year fixed rates, but lowers 30 year rate to 2.5%! (May 2022)

Avant will raise their 5-, 7-, 10-, 15-, and 20-year fixed rates for applications received after May 13th. The increases are of the order of 20-to-30 bps. https://www.rte.ie/news/business/2022/0506/1296524-avant-money-to-increase-some-mortgage-rates/ Their 3- and 4-year rates will remain...
www.askaboutmoney.com

But even Avant might not apply that policy again if they raise their rates in the future.
 
Current lender: Ulster Bank
Outstanding mortgage balance: 266k
Approximate value of your property: 675k
The date you started your fixed-rate mortgage: 31st March 2022
How many years you fixed for: 5
Your current mortgage interest rate: 2.2%
Your current monthly repayment: €1,286
Your property's BER: A3
Are you due to get extra cashback from your current lender in the future: No

Other info: I recently changed jobs so I re-fixed with UB last March as wouldn't be out of probation period in current roll until late Autumn. I have a couple of questions, if worthwhile can I start the switch process while UB mortgage is in process of moving to PTSB automatically by end of the year. Also, would something like the Avant One Mortgage product for the entire remaining term be the best bet if switching?
 
  • Current lender: Ulster Bank
  • Outstanding mortgage balance (how much you still owe): €370,518.55
  • Approximate current value of your property: €483,403
  • The date you started your fixed-rate mortgage (month and year): March 2021 (Current product ends 31-12-2022)
  • How many years you fixed for: 2 years
  • Your current mortgage interest rate: 2.3%
  • Your current monthly repayment (excluding any overpayments): €1,471.86
  • Your property's BER (Building Energy Rating) – check it here or estimate it if necessary: D2
  • 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?: No
Also looking to top up the mortgage to help pay for home improvements (energy upgrades and retrofit to bring BER to A rating), and extension.
 
@Maurice83 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 Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €2,540 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 €1,540 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)

  • Re-fixing immediately on Ulster Bank's 5-year fixed rate (2.2% with no cashback) will not save you or cost you anything over the next 4 years, but it will "reset the clock" on the fixed-rate period. 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 interest rate won't change for 5 years but 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 right now, the best rate you would be able to switch to today is 2.8%
    • 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 7-year fixed rate (2.25% with no cashback) will leave you worse off by about €2,000 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 €3,500 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 €4,520 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 22 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 €6,060 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).
    • Note that if you decide to do this, your interest rate won't change for 7 or 10 years but 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 right now, the best rate you would be able to switch to today is 2.8%
    • 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).
    • 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 €8,560 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 €9,560 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 2.8% rate with Permanent TSB (who will probably own your mortgage) when the current fixed rate ends. And that's assuming that Permanent TSB are even offering a 2.8% rate in April 2027 – 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 (provided that at least 3 years have passed since you started the Finance Ireland fixed rate and subject to certain other 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 €5,540 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).

Maurice83 said:
I have a couple of questions, if worthwhile can I start the switch process while UB mortgage is in process of moving to PTSB automatically by end of the year.
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Yes, you are allowed to switch to any lender who will take you – it is irrelevant that PTSB will be taking over your mortgage.

Maurice83 said:
Also, would something like the Avant One Mortgage product for the entire remaining term be the best bet if switching?
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Only you can decide what you you think is best. Fixing for the remaining term with Avant has the advantage that your interest rate won't change but the disadvantage that there may be a break fee in the future (if you paid off your mortgage early or you traded down or you switched to another lender). But of course break fees can be low or even zero – they are very difficult to predict when you fix for a long period.

Maurice83 said:
Other info: I recently changed jobs so I re-fixed with UB last March as wouldn't be out of probation period in current roll until late Autumn.
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You might be able to start the switch and get approval in principle (AIP) with some lenders even if you are on probation, but you won't be able to complete the switch until your probation is over (at which point rates will probably be higher). Ask the lender or a broker what their attitude to you being on probation is.

One risk of starting a switch now is that you might become liable for brokers' fees and/or solicitors' fees if you abandon the switch (which you might want to do if rates increase). Check with some brokers and solicitors if you would be liable for fees in such a situation.
 
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Hi there,

I’m an Ulster Bank customer and am in the process of switching to AIB’s 2.1% Green Rating due to Ulster exiting the Irish market. I’m looking to know if there will be a breakage fee for switching? I recently requested and received a redemption statement which states the Early Redemption (Breakage) Charge is € 0. However, over the phone they mentioned it would be 6x months of interest…very confusing! I have my details below if someone could take a look please:

  • Current lender – Ulster Bank
  • Outstanding mortgage balance – €116,615
  • Approximate current value of your property – €268,000
  • The date you started your fixed-rate mortgage – June 2019
  • How many years you fixed for – 4 years
  • Your current mortgage interest rate – 2.6%
  • Your current monthly repayment - €640.54 (overpay €1000 each month)
  • Your property's BER – B1
  • Are you due to get extra cashback from your current lender in the future - No
 
  • Current lender – KBC
  • Outstanding mortgage balance – €273,000
  • Approximate current value of your property – €375,000
  • The date you started your fixed-rate mortgage – September 2019
  • How many years you fixed for – 5 years
  • Your current mortgage interest rate – 2.8%
  • Your current monthly repayment - €1076.47
  • Your property's BER – E1
  • Are you due to get extra cashback from your current lender in the future - No

Other Info: Have contacted KBC and confirmed the breakage fee is € 0. Looking for any information with regards who to switch to

Thanks
 
@cdev90 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 Permanent TSB's 5-year fixed rate (2.55% with €7,409 initial cashback and 2% monthly cashback) will save you about €2,260 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 right now, the best rate you would be able to switch to today is 3.0%
    • 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).
    • Warning: Permanent TSB's rate for topups is very high – see below for more information

  • Switching immediately to AIB's 4-year fixed rate (2.2% with €2,000 cashback) will save you about €680 over the next 4 years

  • Switching immediately to Ulster Bank's 5-year fixed rate (2.2% with no cashback) will save you about €140 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 interest rate won't change for 5 years but 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 right now, 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 Haven's 5-year fixed rate (2.55% with €5,000 cashback) will leave you worse off by about €1,320 over the next 4 years

  • Switching immediately to Haven's 7-year fixed rate (2.65% with €5,000 cashback) will leave you worse off by about €2,760 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Haven's 10-year fixed rate (2.85% with €5,000 cashback) will leave you worse off by about €5,640 over the next 4 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to Avant Money's 4-year fixed rate (2.65% with no cashback) will leave you worse off by about €7,800 over the next 4 years

  • Switching immediately to Ulster Bank's 7- or 10-year fixed rate (2.95% with no cashback) will leave you worse off by about €10,640 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 Avant Money's 5-year fixed rate (2.85% with no cashback) will leave you worse off by about €10,680 over the next 4 years

  • Switching immediately to Avant Money's 7-year fixed rate (3.15% with no cashback) will leave you worse off by about €15,020 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (3.15% with no cashback) will leave you worse off by about €15,020 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
    • And your interest rate (initially 3.15%) will fall to 3.05% in 3 years and 10 months when you move into a lower loan-to-value bracket (or sooner if you make overpayments or your property increases in value and you get an updated valuation). See the section "How we decide rate reductions" on this page.
    • And your interest rate will fall again in the future

  • Switching immediately to Finance Ireland's 20-year fixed rate (3.25% with no cashback) will leave you worse off by about €16,460 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
    • And your interest rate (initially 3.25%) will fall to 3.15% in 3 years and 11 months when you move into a lower loan-to-value bracket (or sooner if you make overpayments or your property increases in value and you get an updated valuation). See the section "How we decide rate reductions" on this page.
    • And your interest rate will fall again in the future

  • Switching immediately to Finance Ireland's 25-year fixed rate (3.4% with no cashback) will leave you worse off by about €18,640 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
    • And your interest rate (initially 3.4%) will fall to 3.3% in 4 years when you move into a lower loan-to-value bracket (or sooner if you make overpayments or your property increases in value and you get an updated valuation). See the section "How we decide rate reductions" on this page.
    • And your interest rate will fall again in the future

  • Switching immediately to Avant Money's 10-year fixed rate (3.6% with no cashback) will leave you worse off by about €21,540 over the next 4 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to Avant Money's "One Mortgage" (a 3.75% fixed rate with no cashback) will leave you worse off by about €23,720 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 29 years)

The above Avant rates include their rate increases announced on 12 August 2022. While Avant's rates are not the lowest at present, it is possible that they will be amongst the lowest in the near future when other lenders increase their rates. (That is not a major consideration if you decide to re-fix with Ulster Bank, since re-fixing with your current lender is usually quick to do.)

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 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 (provided that at least 3 years have passed since you started the Finance Ireland fixed rate and subject to certain other 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 apply simultaneously to two or more lenders for approval in principle (AIP).

cdev90 said:
Also looking to top up the mortgage to help pay for home improvements (energy upgrades and retrofit to bring BER to A rating), and extension.
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Be aware that Permanent TSB's interest rate for topups is very high, currently 3.95% – see this thread. And it is a variable rate so it could increase.

Current Ulster Bank mortgage customers can still apply for a topup but the deadline for applying is 26 August 2022. If you decide to re-fix with Ulster Bank but don't apply for the topup by that date, you will have to wait until Permanent TSB take over your mortgage before you can get a topup, and it will be at Permanent TSB's high rates.

The interest rate on AIB's topups is the same as their mortgage rates – see their topup mortgage webpage.

You would need to contact the other lenders, or a broker who works with them, to find out their rules around topups.
 
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@Norms5 Your break fee is still zero and is very likely to remain zero for the foreseeable future.

The "six months' interest" refers to the cap that Ulster Bank put on break fees – but it is not relevant in your situation since your break fee is zero.

If you are far along in the process of switching to AIB, you are probably best to continue on that path. But if you have only recently started the process or if you want me to estimate the savings you would make from switching to other lenders (or from re-fixing with Ulster Bank), let me know.

If you do switch to AIB's 2.1% green rate it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread).
 
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@Sean92
  • Switching immediately to Haven's 3-year fixed rate (2.35% with €5,000 cashback) will save you about €7,400 over the next 3 years

  • Switching immediately to Haven's 5-year fixed rate (2.55% with €5,000 cashback) will save you about €5,780 over the next 3 years

  • Switching immediately to AIB's 4-year fixed rate (2.2% with €2,000 cashback) will save you about €5,600 over the next 3 years

  • Switching immediately to Haven's 7-year fixed rate (2.65% with €5,000 cashback) will save you about €4,980 over the next 3 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to KBC's 3-year fixed rate (2.3% with no cashback) will save you about €4,100 over the next 3 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 interest rate won't change for 3 years but 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 right now, the best rate you would be able to switch to today is 3.0%
    • 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 AIB's 3-year fixed rate (2.45% with €2,000 cashback) will save you about €3,600 over the next 3 years

  • Switching immediately to AIB's 5-year fixed rate (2.45% with €2,000 cashback) will save you about €3,600 over the next 3 years

  • Switching immediately to Haven's 10-year fixed rate (2.85% with €5,000 cashback) will save you about €3,380 over the next 3 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to KBC's 5-year fixed rate (2.45% with no cashback) will save you about €2,900 over the next 3 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 Bank of Ireland rates in the future apply

  • Switching immediately to Avant Money's 4-year fixed rate (2.65% with no cashback) will leave you worse off by about €60 over the next 3 years
    • You would have to shorten your mortgage term to 30 years to be eligible for this rate
    • The monthly repayment would be €1,100

  • Switching immediately to AIB's 7-year fixed rate (3.05% with €2,000 cashback) will leave you worse off by about €1,240 over the next 3 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to KBC's 10-year fixed rate (2.99% with no cashback) will leave you worse off by about €1,460 over the next 3 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).
    • 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 (2.85% with no cashback) will leave you worse off by about €1,660 over the next 3 years
    • You would have to shorten your mortgage term to 30 years to be eligible for this rate
    • The monthly repayment would be €1,129

  • Switching immediately to AIB's 10-year fixed rate (3.2% with €2,000 cashback) will leave you worse off by about €2,460 over the next 3 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to Avant Money's 7-year fixed rate (3.15% with no cashback) will leave you worse off by about €4,080 over the next 3 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 €1,173

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (3.15% with no cashback) will leave you worse off by about €4,080 over the next 3 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
    • And your interest rate (initially 3.15%) will fall to 3.05% in 2 years and 1 month when you move into a lower loan-to-value bracket (or sooner if you make overpayments or your property increases in value and you get an updated valuation). See the section "How we decide rate reductions" on this page.
    • And your interest rate will fall again in the future

  • Switching immediately to Finance Ireland's 20-year fixed rate (3.25% with no cashback) will leave you worse off by about €4,900 over the next 3 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
    • And your interest rate (initially 3.25%) will fall to 3.15% in 2 years and 2 months when you move into a lower loan-to-value bracket (or sooner if you make overpayments or your property increases in value and you get an updated valuation). See the section "How we decide rate reductions" on this page.
    • And your interest rate will fall again in the future

  • Switching immediately to Finance Ireland's 25-year fixed rate (3.4% with no cashback) will leave you worse off by about €6,100 over the next 3 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
    • And your interest rate (initially 3.4%) will fall to 3.3% in 2 years and 2 months when you move into a lower loan-to-value bracket (or sooner if you make overpayments or your property increases in value and you get an updated valuation). See the section "How we decide rate reductions" on this page.
    • And your interest rate will fall again in the future

  • Switching immediately to Avant Money's 10-year fixed rate (3.6% with no cashback) will leave you worse off by about €7,720 over the next 3 years – but with the 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 €1,241

  • Switching immediately to Avant Money's "One Mortgage" (a 3.75% fixed rate with no cashback) will leave you worse off by about €8,940 over the next 3 years – and the interest rate will remain fixed for the remainder of your mortgage term
    • You would have to shorten your mortgage term to 30 years to be eligible for this rate
    • The monthly repayment would be €1,264

The above Avant rates include their rate increases announced on 12 August 2022. While Avant's rates are not the lowest at present, it is possible that they will be amongst the lowest in the near future when other lenders increase their rates. (That is not a major consideration if you decide to re-fix with KBC, since re-fixing with your current lender is usually quick to do.)

These savings estimates use for comparison the scenario of switching to the 2.9% rate with Bank of Ireland (who will probably own your mortgage) when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 2.9% rate in September 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.

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 (provided that at least 3 years have passed since you started the Finance Ireland fixed rate and subject to certain other conditions).

The estimates also assume that your loan-to-value ratio (LTV) is currently 273.0k/375.0k = 72.8%. A slightly higher property valuation (€390k) and/or a few more monthly mortgage payments and/or a lump sum overpayment would get you into a lower LTV bracket (< 70%), and you would be eligible for lower rates from Avant and Finance Ireland. But that is probably not a good 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 apply simultaneously to two or more lenders for approval in principle (AIP).
 
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Hi there

I just moved to Avant and originally fixed for three years at 1.95%, I then increased the fixed rate to 5 years.
I'm wondering if I should fix it for longer now.
They have offered me a 7-year fixed rate of 2.25% and a ten-year fixed rate of 2.4% and One mortgage at 2.4% <60% LTV, 15 term
In their letter offer, they state there may be compensation due as I would be breaking the fixed rate. I have to call them to get this breakage figure.
I currently have ten years left on my mortgage.

Thoughts?
  • Current lender – Avant
  • Outstanding mortgage balance – €165,000
  • Approximate current value of your property – €400,000
  • The date you started your fixed-rate mortgage – June 2020
  • How many years you fixed for – 5 years
  • Your current mortgage interest rate – 1.95%
  • Your current monthly repayment - €1431
  • Your property's BER – B1
  • Are you due to get extra cashback from your current lender in the future - No
 
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I think you should probably stick at 1.95% for 5 years. Here is your annual schedule if you do.


Very crudely,
Your average balance for the 5 years fixed is €133k - So you will save ..45 % a year or €3,000 by staying as you are and not fixing for 10 years.

Your average balance for the remaining 5 years after that will be €52k
Say the rate for the last 5 years goes to 3.4% - not paying 2.4% will cost you about €2,500

In times of inflation, €3,000 over the next 5 years is worth far more than €2,500 5 years later.

Furthermore, in practice, a lot of people pay off their mortgage early. So you might not get the benefit of the lower long term rate. And you might face an early break fee.

So, all in all, stay on the low rate you are on.

Brendan
 
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Note that @pclive has only three years left on their fixed rate, not five.

That might make it a good idea to fix for 7 years at 2.25%.

@Brendan Burgess Could you re-do your figures for this scenario?

@pclive Your break fee should be zero at the moment – but confirm it with Avant Money. If it is higher than zero, please post it here when you receive it, including the date of the letter.

Ensure that you are still eligible for the 2.25% rate – Avant are putting up their rates tomorrow (see this thread) but hopefully they will honour the pre-increase rates that they quoted you.
 
Brendan Burgess said:
Hi Paul

It's not clear that he has only 3 years left. I would think "just moved to Avant " means June 2022 and the 2020 is a typo?

Pclive could you confirm when your 5 year fix expires?

Brendan
Click to expand...
Apologies for the typo, I just switched to Avant so that should read June 2022.
 
pclive said:
Apologies for the typo, I just switched to Avant so that should read June 2022.
Click to expand...

In that case there could be a substantial break fee. It will depend on when exactly in June that you fixed. The five-year swap rate (a proxy for the rate used by Avant) has fallen since June, which is why there will be a break fee.
 
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  • Current lender - KBC
  • Outstanding mortgage balance (how much you still owe) - 260,000
  • Approximate current value of your property - 575,000
  • The date you started your fixed-rate mortgage (month and year) - June 2018
  • How many years you fixed for - 5 years
  • Your current mortgage interest rate - 2.9%
  • Your current monthly repayment (excluding any overpayments) - 1,744
  • 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 - No
KBC confirmed there won't be any break fee.

Thanks.
 
@Leinstor
  • Switching immediately to Haven's 3-year fixed rate (2.35% with €5,000 cashback) will save you about €8,060 over the next 3 years

  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €7,600 over the next 3 years

  • Switching immediately to AIB's 5-year green fixed rate (2.1% with €2,000 cashback) will save you about €6,880 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)

  • Switching immediately to Haven's 7-year fixed rate (2.65% with €5,000 cashback) will save you about €5,880 over the next 3 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to KBC's 3-year fixed rate (2.25% with no cashback) will save you about €5,080 over the next 3 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 interest rate won't change for 3 years but 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 right now, the best rate you would be able to switch to today is 3.0%
    • 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 Haven's 10-year fixed rate (2.85% with €5,000 cashback) will save you about €4,420 over the next 3 years – but with the longer security of 10 years on a fixed rate

  • Switching immediately to KBC's 5-year fixed rate (2.4% with no cashback) will save you about €4,000 over the next 3 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 Bank of Ireland rates in the future apply

  • Switching immediately to Avant Money's 4-year fixed rate (2.45% with no cashback) will save you about €2,300 over the next 3 years

  • Switching immediately to Avant Money's 5-year fixed rate (2.65% with no cashback) will save you about €840 over the next 3 years

  • Switching immediately to KBC's 10-year fixed rate (2.85% with no cashback) will save you about €720 over the next 3 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).
    • The same warnings as above regarding higher Bank of Ireland rates in the future apply – although there would only be about five and half years left on your mortgage when the 10-year fixed rate expires, and so rate increases would matter less than they do now

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.9% with no cashback) will leave you worse off by about €980 over the next 3 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 Avant Money's 7-year fixed rate (2.95% with no cashback) will leave you worse off by about €1,340 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 (3.4% with no cashback) will leave you worse off by about €4,640 over the next 3 years – but with the longer security of 10 years on a fixed rate
    • The monthly repayment would be €1,807

  • Switching immediately to Avant Money's "One Mortgage" (a 3.4% fixed rate with no cashback) will leave you worse off by about €4,640 over the next 3 years – and the interest rate will remain fixed for the remainder of your mortgage term
    • You would have to shorten your mortgage term to 15 years to be eligible for this rate
    • The monthly repayment would be €1,846

The above Avant rates include their rate increases announced on 12 August 2022. While Avant's rates are not the lowest at present, it is possible that they will be amongst the lowest in the near future when other lenders increase their rates. (That is not a major consideration if you decide to re-fix with KBC, since re-fixing with your current lender is usually quick to do.)

These savings estimates use for comparison the scenario of switching to a 3% 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 3% rate in June 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 (provided that at least 3 years have passed since you started the Finance Ireland fixed rate and subject to certain other 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 €10,600 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.

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 you mind having a look at this- any advice is welcome! thank you!

Current lender: Ulster Bank
Outstanding mortgage balance: €151,376
Approximate value of your property: €470k
The date you started your fixed-rate mortgage:8/5/2019
How many years you fixed for: 4 yrs
Your current mortgage interest rate: 2.6%
Your current monthly repayment: €733.11
Your property's BER: B1
Are you due to get extra cashback from your current lender in the future: No

Ulster Bank have confirmed breakage fee as 0.
 
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