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

[Paul F]

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

@cwalsh

• Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €4,880 over the next 4 years
  
  
• Switching immediately to AIB's 5-year green fixed rate (2.1% with €2,000 cashback) will save you about €4,300 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)
  
  
• Switching immediately to Ulster Bank's 4-year green fixed rate (2.25% with no cashback) will save you about €2,880 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 4 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 Ulster Bank's 5-year fixed rate (2.35% with no cashback) will save you about €2,320 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 Haven's 7-year fixed rate (2.65% with €2,000 cashback) will save you about €1,140 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Avant Money's 4-year fixed rate (2.45% with no cashback) will save you about €260 over the next 4 years
  
  
• Switching immediately to Haven's 10-year fixed rate (2.85% with €2,000 cashback) will leave you worse off by about €20 over the next 4 years – but with the longer security of 10 years on a fixed rate
  
  
• Switching immediately to Ulster Bank's 7- or 10-year fixed rate (2.8% with no cashback) will leave you worse off by about €280 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 (2.65% with no cashback) will leave you worse off by about €900 over the next 4 years
  
  
• Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.9% with no cashback) will leave you worse off by about €2,340 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 Avant Money's 7-year fixed rate (2.95% with no cashback) will leave you worse off by about €2,640 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Finance Ireland's 20-year fixed rate (3.0% with no cashback) will leave you worse off by about €2,920 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 Avant Money's 10-year fixed rate (3.4% with no cashback) will leave you worse off by about €5,260 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 3.5% fixed rate with no cashback) will leave you worse off by about €5,840 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 23 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 2.8% 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 July 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).

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).

If you use a broker and they tell you that your mortgage balance is too low to switch, find another broker.

 

[cwalsh]

@cwalsh

• Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €4,880 over the next 4 years
  
  
• Switching immediately to AIB's 5-year green fixed rate (2.1% with €2,000 cashback) will save you about €4,300 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)
  
  
• Switching immediately to Ulster Bank's 4-year green fixed rate (2.25% with no cashback) will save you about €2,880 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 4 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 Ulster Bank's 5-year fixed rate (2.35% with no cashback) will save you about €2,320 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 Haven's 7-year fixed rate (2.65% with €2,000 cashback) will save you about €1,140 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Avant Money's 4-year fixed rate (2.45% with no cashback) will save you about €260 over the next 4 years
  
  
• Switching immediately to Haven's 10-year fixed rate (2.85% with €2,000 cashback) will leave you worse off by about €20 over the next 4 years – but with the longer security of 10 years on a fixed rate
  
  
• Switching immediately to Ulster Bank's 7- or 10-year fixed rate (2.8% with no cashback) will leave you worse off by about €280 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 (2.65% with no cashback) will leave you worse off by about €900 over the next 4 years
  
  
• Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.9% with no cashback) will leave you worse off by about €2,340 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 Avant Money's 7-year fixed rate (2.95% with no cashback) will leave you worse off by about €2,640 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Finance Ireland's 20-year fixed rate (3.0% with no cashback) will leave you worse off by about €2,920 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 Avant Money's 10-year fixed rate (3.4% with no cashback) will leave you worse off by about €5,260 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 3.5% fixed rate with no cashback) will leave you worse off by about €5,840 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 23 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 to.)

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 July 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).

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).

If you use a broker and they tell you that your mortgage balance is too low to switch, find another broker.

@Paul F thank you so much for that information, i really appreciate your time and knowledge. Thanks again!

 

[Norms5]

@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).

Hi Paul,
Thanks for looking into this.
Good to know the breakage fee is zero and will hopefully remain at zero.

I've been trying to move to AIB for three months now and have yet to receive the letter of offer, not sure if that's far along?
Do you think AIB's 2.1% is the best option or should I look elsewhere? Happy to look at other options for better savings!

 

[abc789]

• Current lender EBS
• Outstanding mortgage balance (how much you still owe) €200,000
• Approximate current value of your property €320,000
• The date you started your fixed-rate mortgage (month and year) Not on Fixed rate at present
• How many years you fixed for - Not on Fixed Rate at Present
• Your current mortgage interest rate 3.7%
• Your current monthly repayment (excluding any overpayments) €1,220
• Your property's BER (Building Energy Rating) – check it here or estimate it if necessary B3
• 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

Was initially looking at avant 7 year fixed rate but that has increased to 3.05% had just received “approved in principal” so missed out on the 2.35% fixed rate.
Now looking at EBS (current provider) green rate of 2.1% 4yr fixed rate as won’t have to pay solicitor costs but won’t have as much security as the 7 year avant rate.
The broker we are using reckons that fixed prices will increase shortly, therefore avants 3.05% 7 year rate will be cheaper.
All advice greatly appreciated.
Many thanks.

 

[dwyershane]

Current lender: Ulster Bank
Outstanding mortgage balance: €217000
Approximate value of your property: €310000
The date you started your fixed-rate mortgage:30/3/2019
How many years you fixed for: 4 yrs
Your current mortgage interest rate: 2.6%
Your current monthly repayment: €1,102.61
Your property's BER: A3
Are you due to get extra cashback from your current lender in the future: No

 

[Craig_David]

Am I mistaken that the Central Bank LTI/LTV rules dont apply to switcher mortgages?
I have received AIP from BOI & AIB. I also applied to PTSB but had a call from PTSB saying that as the amount i'm looking to borrow (i.e the outstanding balance on the mortgage with my current lender) is greater than 3.5 times my salary, they cannot proceed.
I questioned is this policy specific to PTSB and the rep said that its Central bank rules and they apply regardless if its a new mortgage or a switcher.

 

[JohnB1]

• Current lender: Ulster Bank
• Outstanding mortgage balance (how much you still owe): €301,952
• Approximate current value of your property: €585,000 (note UB list the HPI price as 611k which seems high to me)
• The date you started your fixed-rate mortgage (month and year): December 2021 (Current product ends 31-12-2023)
• How many years you fixed for: 2 years
• Your current mortgage interest rate: 2.2%
• Your current monthly repayment (excluding any overpayments): €1,423.06
• 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?: No

Also looking to possibly top up the mortgage to help pay for home improvements (energy upgrades and retrofit to bring BER to A rating - approx 10k max.)
Thanks.
John.

 

[Paul F]

Happy to look at other options for better savings!

@Norms5

• Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €3,820 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 €3,380 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 Ulster Bank's 4-year green fixed rate (2.25% with no cashback) will save you about €2,180 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 4 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 Ulster Bank's 5-year fixed rate (2.35% with no cashback) will save you about €1,740 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 Haven's 7-year fixed rate (2.65% with €2,000 cashback) will save you about €980 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 €2,000 cashback) will save you about €120 over the next 4 years – but with the longer security of 10 years on a fixed rate
  
  
• Switching immediately to Ulster Bank's 7- or 10-year fixed rate (2.8% with no cashback) will leave you worse off by about €220 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 €2,140 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 Avant Money's 7-year fixed rate (2.95% with no cashback) will leave you worse off by about €2,360 over the next 4 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 €4,340 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 3.5% fixed rate with no cashback) will leave you worse off by about €4,780 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 19 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 a 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 July 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).

If you use a broker and they tell you that your mortgage balance is too low to switch, find another broker.

I've been trying to move to AIB for three months now and have yet to receive the letter of offer, not sure if that's far along?

You should contact AIB and your solicitor to find out which items/steps are outstanding.

It seems unlikely that you could switch to another lender sooner than you could complete the switch to AIB – so AIB seems to be the best option.

If you start the switch to another lender from scratch now, it is quite likely that they will increase their rates before you draw down. The possible exception is Avant (since they have just increased their rates and are – hopefully – unlikely to do so again for a while).

 

[Paul F]

• Current lender EBS
• Outstanding mortgage balance (how much you still owe) €200,000
• Approximate current value of your property €320,000
• The date you started your fixed-rate mortgage (month and year) Not on Fixed rate at present
• How many years you fixed for - Not on Fixed Rate at Present
• Your current mortgage interest rate 3.7%
• Your current monthly repayment (excluding any overpayments) €1,220
• Your property's BER (Building Energy Rating) – check it here or estimate it if necessary B3
• 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

@abc789 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 €13,300 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 €12,200 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 EBS's 4-year green fixed rate (2.1% with no cashback) will save you about €12,020 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 Haven's 7-year fixed rate (2.65% with €2,000 cashback) will save you about €8,460 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Avant Money's 4-year fixed rate (2.55% with no cashback) will save you about €7,180 over the next 4 years
  
  
• Switching immediately to Haven's 10-year fixed rate (2.85% with €2,000 cashback) will save you about €6,960 over the next 4 years – but with the longer security of 10 years on a fixed rate
  
  
• Switching immediately to Avant Money's 5-year fixed rate (2.75% with no cashback) will save you about €5,680 over the next 4 years
  
  
• Switching immediately to Avant Money's 7-year fixed rate (3.05% with no cashback) will save you about €3,420 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 (3.05% with no cashback) will save you about €3,420 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 3.05%) will fall to 2.9% in 1 year 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.
  
  
• Switching immediately to Avant Money's 10-year fixed rate (3.5% with no cashback) will save you about €20 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,200
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.55% fixed rate with no cashback) will leave you worse off by about €400 over the next 4 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 €1,435
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.65% fixed rate with no cashback) will leave you worse off by about €1,120 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 19 years)
  • The monthly repayment would be €1,215

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 EBS, since re-fixing with your current lender is usually quick to do.)

These savings estimates use for comparison the scenario of staying on the variable rate with EBS and assume that that rate doesn't change between now and August 2026 (which is very unlikely). 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 200.0k/320.0k = 62.5%. A slightly higher property valuation (€334k) and/or a few more monthly mortgage payments and/or a lump sum overpayment would get you into a lower LTV bracket (< 60%), and you would be eligible for lower rates from Avant (e.g., 2.95% fixed for 7 years). 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).

 

[Paul F]

Am I mistaken that the Central Bank LTI/LTV rules dont apply to switcher mortgages?
I have received AIP from BOI & AIB. I also applied to PTSB but had a call from PTSB saying that as the amount i'm looking to borrow (i.e the outstanding balance on the mortgage with my current lender) is greater than 3.5 times my salary, they cannot proceed.
I questioned is this policy specific to PTSB and the rep said that its Central bank rules and they apply regardless if its a new mortgage or a switcher.

The PTSB employee is wrong in what they said – switchers are indeed exempt from the Central Bank's LTI and LTV rules (as long as you are not looking for a topup).

But any lender is free to refuse to let you switch to them because your LTI ratio is too high based on the lender's own rules. I.e., just because the Central Bank allows the lender to lend to you, that doesn't mean that they will.

You might run into the same issue with BOI and AIB.

If so, your only realistic options are to re-fix with KBC (your current lender), or try to get AIP from Haven and hope that they are less strict when it comes to LTI. (You might want to re-fix with KBC anyway because other lenders could put up their rates quite soon.)

 

[Sir Bob Paisley]

• BOI
• €237000
• €1025000
• 07/18
• 5
• 2.7%
• €1378
• A3
• Yes €2920 Sep 22

Want to reduce term to 15 from the 19 remaining as I’m already overpaying €150 per month and comfortable with the repayments

 

[Paul F]

1) 2.7%
2) September 2023
3) €237000
4) 19
5) BOI
6) €1025000
7) €150 per month
8) No
9) Finance Ireland 2.9% fixed for 15 years to reduce Mortage term and not be concerned about rising rates
10) A3

@Sir Bob Paisley Please edit your mortgage details so that they are in the format shown in the first post of this thread.

 

[Sir Bob Paisley]

Pa

@Sir Bob Paisley Please edit your mortgage details so that they are in the format shown in the first post of this thread.

done now, apologies

 

[Paul F]

Current lender: Ulster Bank
Outstanding mortgage balance: €217000
Approximate value of your property: €310000
The date you started your fixed-rate mortgage:30/3/2019
How many years you fixed for: 4 yrs
Your current mortgage interest rate: 2.6%
Your current monthly repayment: €1,102.61
Your property's BER: A3
Are you due to get extra cashback from your current lender in the future: No

@dwyershane 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 €6,820 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 €5,600 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 Ulster Bank's 4-year green fixed rate (2.35% with no cashback) will save you about €3,420 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 4 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 Ulster Bank's 5-year fixed rate (2.45% with no cashback) will save you about €2,600 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 Haven's 7-year fixed rate (2.65% with €2,000 cashback) will save you about €1,500 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to AIB's 4-year fixed rate (2.75% with €2,000 cashback) will save you about €680 over the next 4 years
  
  
• Switching immediately to Avant Money's 4-year fixed rate (2.55% with no cashback) will save you about €280 over the next 4 years
  
  
• Switching immediately to Haven's 10-year fixed rate (2.85% with €2,000 cashback) will leave you worse off by about €140 over the next 4 years – but with the longer security of 10 years on a fixed rate
  
  
• Switching immediately to Avant Money's 5-year fixed rate (2.75% with no cashback) will leave you worse off by about €1,360 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 €1,520 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 AIB's 7-year fixed rate (3.05% with €2,000 cashback) will leave you worse off by about €1,800 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to AIB's 10-year fixed rate (3.2% with €2,000 cashback) will leave you worse off by about €3,040 over the next 4 years – but with the longer security of 10 years on a fixed rate
  
  
• Switching immediately to Avant Money's 7-year fixed rate (3.05% with no cashback) will leave you worse off by about €3,840 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 (3.05% with no cashback) will leave you worse off by about €3,840 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 3.05%) will fall to 2.9% in 4 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.
  
  
• Switching immediately to Finance Ireland's 20-year fixed rate (3.15% with no cashback) will leave you worse off by about €4,660 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 3.15%) will fall to 3.0% in 4 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.
  
  
• Switching immediately to Avant Money's 10-year fixed rate (3.5% with no cashback) will leave you worse off by about €7,560 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 3.65% fixed rate with no cashback) will leave you worse off by about €8,820 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 21 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 a 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 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).

The estimates also assume that your loan-to-value ratio (LTV) really is 70% or below so that you are eligible for the listed rates. Your LTV estimate is 217.0k/310.0k = 70.0%. If you get a valuation of less than €310k, you will need to make a few more monthly mortgage payments and/or a lump sum overpayment to get the LTV below 70%. 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 apply simultaneously to two or more lenders for approval in principle (AIP).

 

[Craig_David]

The PTSB employee is wrong in what they said – switchers are indeed exempt from the Central Bank's LTI and LTV rules (as long as you are not looking for a topup).

But any lender is free to refuse to let you switch to them because your LTI ratio is too high based on the lender's own rules. I.e., just because the Central Bank allows the lender to lend to you, that doesn't mean that they will.

You might run into the same issue with BOI and AIB.

If so, your only realistic options are to re-fix with KBC (your current lender), or try to get AIP from Haven and hope that they are less strict when it comes to LTI. (You might want to re-fix with KBC anyway because other lenders could put up their rates quite soon.)

thanks Paul.
Shortly after I posted I got another phone call from PTSB from the rep saying they arent actually sure if the Central Bank rules apply to switcher and that she would have to check with the underwriters and call me back today (which she never did).
I did get loan offer from BOI in the meantime anyway so all good.

 

[Paul F]

• Current lender: Ulster Bank
• Outstanding mortgage balance (how much you still owe): €301,952
• Approximate current value of your property: €585,000 (note UB list the HPI price as 611k which seems high to me)
• The date you started your fixed-rate mortgage (month and year): December 2021 (Current product ends 31-12-2023)
• How many years you fixed for: 2 years
• Your current mortgage interest rate: 2.2%
• Your current monthly repayment (excluding any overpayments): €1,423.06
• 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?: No

@JohnB1 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 AIB's 4-year fixed rate (2.2% with €2,000 cashback) will save you about €6,000 over the next 4 years
  
  
• Switching immediately to Ulster Bank's 5-year fixed rate (2.2% with no cashback) will save you about €5,460 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 save you about €5,000 over the next 4 years
  
  
• Switching immediately to Haven's 7-year fixed rate (2.65% with €5,000 cashback) will save you about €3,840 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 save you about €1,540 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 (2.45% with no cashback) will save you about €1,100 over the next 4 years
  
  
• Switching immediately to Avant Money's 5-year fixed rate (2.65% with no cashback) will leave you worse off by about €1,180 over the next 4 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 €1,420 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 €4,060 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 Avant Money's 7-year fixed rate (2.95% with no cashback) will leave you worse off by about €4,640 over the next 4 years – but with the longer security of 7 years on a fixed rate
  
  
• Switching immediately to Finance Ireland's 20-year fixed rate (3.0% with no cashback) will leave you worse off by about €5,220 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 Avant Money's 10-year fixed rate (3.4% with no cashback) will leave you worse off by about €9,860 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 3.5% fixed rate with no cashback) will leave you worse off by about €11,020 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 22 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 a 2.95% 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 2.95% rate in January 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).

Some of the above lenders will only let you switch to them if you have had a mortgage with your current lender for at least 12 months. (Perhaps you have, in which case this doesn't apply to you.) See this thread for more details.

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).

Also looking to possibly top up the mortgage to help pay for home improvements (energy upgrades and retrofit to bring BER to A rating - approx 10k max.)

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 very high topup rate, currently 3.95% – see this thread. And it is a variable rate so it could increase.

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.

 

[Paul F]

Shortly after I posted I got another phone call from PTSB from the rep saying they arent actually sure if the Central Bank rules apply to switcher and that she would have to check with the underwriters and call me back today (which she never did).

So heartening that this is the lender who will take over thousands of Ulster Bank's mortgages soon!

I did get loan offer from BOI in the meantime anyway so all good.

Good that you did but keep in mind what I said about Bank of Ireland in my first reply to you – they discriminate between new and existing customers (their best rates are not available to existing customers). Be sure to review your mortgage every year and see if it makes sense to switch.

 

[Paul F]

• The date you started your fixed-rate mortgage (month and year): 07/18
• How many years you fixed for: 5
• [...]
• Are you due to get extra cashback from your current lender in the future? Yes €2920 Sep 22

@Sir Bob Paisley Can you confirm that the month and year of the future cashback is correct? Did you mean September 2022 or September 2023?

 

[Sir Bob Paisley]

@Sir Bob Paisley Can you confirm that the month and year of the future cashback is correct? Did you mean September 2022 or September 2023?

Sep 2022, next month

 

[Paul F]

• BOI
• €237000
• €1025000
• 07/18
• 5
• 2.7%
• €1378
• A3
• Yes €2920 Sep 22

Want to reduce term to 15 from the 19 remaining as I’m already overpaying €150 per month and comfortable with the repayments

@Sir Bob Paisley Your break fee should be zero at the moment – but confirm it with Bank of Ireland. If it is higher than zero, please post it here when you receive it, including the date of the letter.

The below estimates assume that your current monthly payment to Bank of Ireland is €1,603. This is in order to simulate a mortgage with a term of 15 years.

• Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €8,460 over the next 4 years
  • The monthly repayment would be €1,525
  
  
• Switching immediately to AIB's 5-year green fixed rate (2.1% with €2,000 cashback) will save you about €7,620 over the next 4 years
  • The monthly repayment would be €1,536
  • 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 €2,000 cashback) will save you about €2,900 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • The monthly repayment would be €1,597
  
  
• Switching immediately to Avant Money's 4-year fixed rate (2.45% with no cashback) will save you about €2,580 over the next 4 years
  • The monthly repayment would be €1,575
  
  
• Switching immediately to Haven's 10-year fixed rate (2.85% with €2,000 cashback) will save you about €1,180 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,620
  
  
• Switching immediately to Avant Money's 5-year fixed rate (2.65% with no cashback) will save you about €860 over the next 4 years
  • The monthly repayment would be €1,597
  
  
• Switching immediately to Bank of Ireland's 5-year fixed rate (3.0% with no cashback) will leave you worse off by about €660 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
  • The monthly repayment would be €1,637 (and you would need to instruct Bank of Ireland that you want to reduce the term to 15 years)
  
  
• Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.9% with no cashback) will leave you worse off by about €1,280 over the next 4 years – but with the longer security of 10 or 15 years on a fixed rate
  • The monthly repayment would be €1,625
  • 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 €1,720 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • The monthly repayment would be €1,631
  
  
• Switching immediately to Bank of Ireland's 10-year fixed rate (3.3% with no cashback) will leave you worse off by about €3,420 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).
  • The monthly repayment would be €1,671 (and you would need to instruct Bank of Ireland that you want to reduce the term to 15 years)
  
  
• Switching immediately to Avant Money's 10-year fixed rate (3.4% with no cashback) will leave you worse off by about €5,620 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • The monthly repayment would be €1,683
  
  
• Switching immediately to Avant Money's "One Mortgage" (a 3.4% fixed rate with no cashback) will leave you worse off by about €5,620 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (15 years)
  • The monthly repayment would be €1,683

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 Bank of Ireland, 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 Bank of Ireland when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 3% rate in July 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.

I have assumed that you will be getting the 1% cashback from Bank of Ireland next month regardless of whether you re-fix with them or switch to another lender (since switching to another lender takes longer than a month).

You should call Bank of Ireland and tell them that you have started the process of switching 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 (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).