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

Hi Paul,

Current lender: BOI
Outstanding mortgage balance (how much you still owe): 336,520
Approximate current value of your property: 550,000
The date you started your fixed-rate mortgage (month and year): 30/11/2027
How many years you fixed for: 5 yrs.
Your current mortgage interest rate: 3%
Your current monthly repayment (excluding any over payments): 1,316.19 (35 yrs)
Your property's BER (Building Energy Rating): A2
Are you due to get extra cashback from your current lender in the future: Yes,1% in 5 yrs.
Did you use a broker when you took out your current mortgage? Yes

From bonkers it looks like there is 2.8% available from PTSB with 2% cashback, is the the best offer. If I went for this I am worried the rates may rise during the process and I'll have to pay needless solcitior fees.

Thank you in advance for reviewing.
 
Letitin said:
The date you started your fixed-rate mortgage (month and year): 30/11/2027
Click to expand...
I'll assume you meant 30/11/2022.

Letitin said:
From bonkers it looks like there is 2.8% available from PTSB with 2% cashback, is the the best offer. If I went for this I am worried the rates may rise during the process and I'll have to pay needless solcitior fees.
Click to expand...

You can't switch to another lender until you have been with your current lender for a certain minimum amount of time. See here.

How long must you be with an existing lender before switching?

Update May 2022 - Brendan These are guidelines. It seems that some people got different answers. Avant : 12 months Finance Ireland - no minimum time ICS: 6 months PTSB require you to be 12 months with previous lender (previously it was 2 years) BofI require you to be 12 months with previous...
www.askaboutmoney.com

Your realistic options (for the moment) are:
  • Do nothing
  • Re-fix for 10 years at 3.3% with BOI. This is not a good idea if you think you might move home in the next few years because you could face a large break fee when you do.
 
Paul F said:
I'll assume you meant 30/11/2022.



You can't switch to another lender until you have been with your current lender for a certain minimum amount of time. See here.

How long must you be with an existing lender before switching?

Update May 2022 - Brendan These are guidelines. It seems that some people got different answers. Avant : 12 months Finance Ireland - no minimum time ICS: 6 months PTSB require you to be 12 months with previous lender (previously it was 2 years) BofI require you to be 12 months with previous...
www.askaboutmoney.com

Your realistic options (for the moment) are:
  • Do nothing
  • Re-fix for 10 years at 3.3% with BOI. This is not a good idea if you think you might move home in the next few years because you could face a large break fee when you do.
Click to expand...

My apologies we started the stage payment draw down in June 2021 (self-build) with BOI for 3 year term at 2.8% and then changed to 5 year term from 30/11/2022 at final drawdown stage. It look like PTSB would then be happy with 12 months of statements so we could potentially move?

Thanks very much for that link - it's very useful.
 
Letitin said:
Current lender: BOI
Outstanding mortgage balance (how much you still owe): 336,520
Approximate current value of your property: 550,000
The date you started your fixed-rate mortgage (month and year): [we started the stage payment draw down in June 2021 (self-build) with BOI for 3 year term at 2.8% and then changed to 5 year term from 30/11/2022 at final drawdown stage]
How many years you fixed for: 5 yrs.
Your current mortgage interest rate: 3%
Your current monthly repayment (excluding any over payments): 1,316.19 (35 yrs)
Your property's BER (Building Energy Rating): A2
Are you due to get extra cashback from your current lender in the future: Yes,1% in 5 yrs.
Did you use a broker when you took out your current mortgage? Yes
Click to expand...
@Letitin Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Bank of Ireland. If it is higher than zero, please post it here when you receive it, including the date of the letter.
  • Switching immediately to Permanent TSB's 5-year green fixed rate (2.8% with €6,730 initial cashback and 2% monthly cashback) will save you about €6,380 over the next 5 years
    • Note that Permanent TSB's interest rates have usually been much higher than other lenders over the past several years. If this pattern resumes, switching to Permanent TSB will cost you a lot more than a cheaper lender over the long term (even accounting for the cashback)
    • So if you switch to them now, you may want to switch again to another lender in the future, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated)
    • A PTSB rate increase of 0.4% or more before you complete the switch would wipe out these savings

  • Switching immediately to Bank of Ireland's 10-year fixed rate (3.3% with no cashback) will leave you worse off by about €5,020 over the next 5 years – but with the longer security of 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to AIB's 5-year green fixed rate (3.15% with €2,000 cashback) will leave you worse off by about €5,300 over the next 5 years
    • And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)
    • For the same reason, it is unlikely that there will be a break fee if you break out of this fixed rate to move home within the next few years

  • Switching immediately to Permanent TSB's 7-year fixed rate (3.65% with €6,730 initial cashback and 2% monthly cashback) will leave you worse off by about €7,480 over the next 5 years – but with the longer security of 7 years on a fixed rate
    • The same warnings as above regarding higher Permanent TSB rates in the future apply

  • Switching immediately to Avant Money's "One Mortgage" (a 4.3% fixed rate with no cashback) will leave you worse off by about €26,280 over the next 5 years – and the interest rate will be 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 €1,665

Bank of Ireland's rate increases of 10th November 2022 do not apply to existing BOI customers who want to re-fix (for the moment), and so they have not been applied when generating the above estimates. This benefit could be removed quite soon.

These savings estimates use for comparison the scenario of switching to a 3.25% rate with Bank of Ireland when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 3.25% rate in December 2027 – it could be higher (or lower). You would get the Bank of Ireland €3,450 future cashback in such a scenario, and the savings estimates account for this. The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

All of Avant's rates 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).

The estimates also assume that you get your loan-to-value ratio (LTV) below 60% so that you are eligible for the some of the listed rates (the PTSB 7-year and the Avant 30-year rates). You are already eligible, from an LTV perspective, for all of the other listed rates. Your LTV is currently 336.5k/550k = 61.2%. A slightly higher property valuation (€561k) and/or a few more monthly mortgage payments and/or a lump sum overpayment will get you below 60%.

Bear in mind that the interest rates of some lenders are very likely to 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).

Check with potential lenders that they consider you to have had your BOI mortgage for at least 12 months.

Dates of the most-recent interest rate increases:
  • Avant: 8th December 2022, 15th August 2022 and 16th May 2022
  • AIB, EBS and Haven: 25th November 2022 and 14th October 2022
  • Permanent TSB: 18th November 2022
  • Bank of Ireland: 10th November 2022
Even though it is usually quick to re-fix with your current lender, it is still possible for rates to rise while you are in the middle of the process, which could potentially leave you worse off than if you had done nothing. Ask Bank of Ireland if they will guarantee today's rates for you if you start the process of re-fixing with them.
 
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I just started a mortgage and want to look into switching when I can as the rate is poor, their rates available now have also gone up 1% since mine started.

Current lender: ICS
Outstanding mortgage balance (how much you still owe): 336k
Approximate current value of your property: 591k
The date you started your fixed-rate mortgage (month and year): NOV 2022
How many years you fixed for: 3
Your current mortgage interest rate: 3.75%
Your current monthly repayment (excluding any over payments): 1,560.30 (30 yrs)
Your property's BER (Building Energy Rating): A3
Are you due to get extra cashback from your current lender in the future: No
Did you use a broker when you took out your current mortgage? Yes

Do brokers claw back if you switch too soon? How fast can you generally switch from the start?

I see that BOI can give 2.15% atm, 3 year HVG mortgage <60% LTV but may want you to be with a lender for 12 months, they may waive this due to their relationship with my workplace, will ask.

Is there a way to calculate breakage fee yourself? The values I don't know for the formula are below, do they exist in the public domain day to day?

The market fixed interest rate/swap rate for fixed rate term at the date of its commencement
The market fixed interest rate/swap rate for the remaining fixed term
 
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Thanks, so funds were released on 8th Nov. Taking the 3 year swap and seems the rate was ~2.9 (can't tell it just shows 7th and 9th) then and is ~3.05 now so the formula is something like:
A x (B%-C%) x D / 365
336000 * (2.9/100 - (3.05/100)) * 1019 / 365 = -1407, so 0? Even if I take B as around the same as C it will only be a few hundred by my calculations.

I went with that one as they were the only lender with exceptions at the time, I needed to borrow some more to get the place. They were 1.95% when I started the process but rates rose quickly while I was waiting on the sale to complete, by then other lenders were all out of exceptions etc.
 
@Shane1883
Yes, break fee should be currently zero.

It's unlikely that you'll be able to switch within first year.
Note, it's also very common for brokers to have a clause that you will need to refund them their commission if you switch in 1st 3 years as lender will claw back from them (on a reducing scale).
 
I was never told about it. I went to check the terms of business I was sent at the outset now but no mention of it anywhere. Perhaps there is some other document they sent or that I signed that has it, hmm.

Mortgages
We may receive up to 1% of the loan for arranging mortgage finance. This commission is
paid by the mortgage lender. In certain circumstances, it will be necessary to charge a fee
for services provided. We will notify you in advance and agree the scale of fees to be
charged.
Please note that lenders may charge specific fees in certain circumstances and if this applies,
these fees will be specified in your Loan Offer. Typically, this situation arises in relation to
specialist lending.
We charge €500 on application for mortgages less than €100,000 or if you are doing a Self-
Build.
Click to expand...

Probably be worth it to save €300pm anyway.
 
Hi All - seeking some advice on my current situation as looking to switch now from BOI .
Was all set to extend current deal with BOI but looks like i missed the boat with their 3% 5 year fixed rate deal.

My updated current situation:

Current lender: BOI
Outstanding mortgage balance: 317k
Approximate value of your property: c600k (bought for 525k in 2017 increase based on sales of similar houses on road recently)
The date you started your fixed-rate mortgage: Dec 2018 - 4 years done Out of 5 year fixed in Dec 2023
How many years you fixed for: 5 years
Your current mortgage interest rate: 2.9%
Term - 30 years have 26 years left
Your current monthly repayment: 1683 per month including 10% over payment
Your property's BER: B3
Are you due to get extra cashback from your current lender in the future: Yes, c3000 in Dec 2023 @ 1%
Lump sum cira 50k which i could use to reduce term

Option 1 - Refix with BOI
- Spoke with BOI just before xmas - offered to refix now to 3% for 5 years and still get cashback owed in Dec 2023 No breakage fee
- Also I would like to pay off a lump sum from my remaining mortgage amount to reduce to (€285k),

**Note that the rates of gone up today & i think i missed 3% offer as my letter was due to be sent back early Jan and i never sent it back so m y new rate be 3.5% if i get letter reissued.

Option 2 - was all set to switch to BOI but i think it now best to switch to AIB green @ 3.1 Rate and reduce term to 20 years will probably work out better with this option . Reduce Mortgage to 285k and reduce term down to 20 years . They give 2,000 to switch .

Is AIB a better deal or i am missing another option

Thanks for your time
 
Keengardener1 said:
Current lender: BOI
Outstanding mortgage balance: 317k
Approximate value of your property: c600k (bought for 525k in 2017 increase based on sales of similar houses on road recently)
The date you started your fixed-rate mortgage: Dec 2018 - 4 years done Out of 5 year fixed in Dec 2023
How many years you fixed for: 5 years
Your current mortgage interest rate: 2.9%
Term - 30 years have 26 years left
Your current monthly repayment: 1683 per month including 10% over payment
Your property's BER: B3
Are you due to get extra cashback from your current lender in the future: Yes, c3000 in Dec 2023 @ 1%
Click to expand...
@Keengardener1 Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Bank of Ireland. If it is higher than zero, please post it here when you receive it, including the date of the letter.
  • Switching immediately to Permanent TSB's 5-year green fixed rate (3.2% with €6,340 initial cashback and 2% monthly cashback) will save you about €9,160 over the next 4 years
    • Note that Permanent TSB's interest rates have usually been much higher than other lenders over the past several years. If this pattern continues, switching to Permanent TSB will cost you a lot more than a cheaper lender over the long term (even accounting for the cashback)
    • So if you switch to them now, you may want to switch again to another lender in the future, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated)

  • Switching immediately to Haven's 4-year green fixed rate (3.0% with €2,000 cashback) will save you about €5,860 over the next 4 years
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to AIB's 5-year green fixed rate (3.1% with €2,000 cashback) will save you about €4,660 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)
    • For the same reason, it is unlikely that there will be a break fee if you break out of this fixed rate to move home within the next few years
    • You would need a house valuation of €634k or higher, or you would need to make a ~€17k overpayment, to be eligible for this rate. Otherwise the rate would be 3.15%.

  • Switching immediately to Bank of Ireland's 5-year fixed rate (3.5% and you would get the 1% (€3,600) 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).

  • Switching immediately to Permanent TSB's 7-year fixed rate (3.8% with €6,340 initial cashback and 2% monthly cashback) will save you about €1,980 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • The same warnings as above regarding higher Permanent TSB rates in the future apply

  • Switching immediately to Haven's 7-year fixed rate (3.65% with €5,000 cashback) will save you about €1,000 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Bank of Ireland's 10-year fixed rate (3.8% and you would get the 1% (€3,600) cashback) will leave you worse off by about €920 over the next 4 years – but with the longer security of 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to Avant Money's 4-year fixed rate (3.4% with no cashback) will leave you worse off by about €1,000 over the next 4 years

  • Switching immediately to Haven's 10-year fixed rate (3.85% with €5,000 cashback) will leave you worse off by about €1,440 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Avant Money's 5-year fixed rate (3.65% with no cashback) will leave you worse off by about €4,040 over the next 4 years

  • Switching immediately to AIB's 7-year fixed rate (3.95% with €2,000 cashback) will leave you worse off by about €5,660 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 (4.1% with €2,000 cashback) will leave you worse off by about €7,480 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 (3.95% with no cashback) will leave you worse off by about €7,680 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Avant Money's "One Mortgage" (a 4.3% fixed rate with no cashback) will leave you worse off by about €11,960 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term (approximately 21 years)

These savings estimates use for comparison the scenario of switching to a 4% rate with Bank of Ireland when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 4% rate in December 2023 – it could be higher (or lower). You would get the Bank of Ireland €3,600 future cashback in such a scenario, and the savings estimates account for this. The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

All of Avant's rates 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).

Bear in mind that the interest rates of some lenders are very likely to 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).

Dates of the most-recent interest rate increases:
  • Bank of Ireland: 24th January 2023 and 10th November 2022
  • Permanent TSB: 13th January 2023 and 18th November 2022
  • Avant: 8th December 2022, 15th August 2022 and 16th May 2022
  • AIB, EBS and Haven: 25th November 2022 and 14th October 2022

Keengardener1 said:
Lump sum cira 50k which i could use to reduce term
Click to expand...
The above estimates assume that you do not pay a lump sum off your mortgage while switching and that you consider €1,683 to be your normal monthly repayment.

Overpaying your mortgage/reducing your balance may not be the best use of your money. Your priorities should usually be:
  • Paying off expensive debt (credit cards, personal loans, car loans, etc.)
  • Building up an emergency fund in a savings/current account (3 to 6 months' living expenses)
  • Saving money for any expenses you will have over the next few years (kids; buying a car; childcare; home renovations; adult children going to college, etc.)
  • Maxing out your pension contributions (very large tax relief is given)
  • Overpaying your mortgage
in approximately that order. Consider posting a thread about your situation in the Money Makeover forum.

Keengardener1 said:
**Note that the rates of gone up today & i think i missed 3% offer as my letter was due to be sent back early Jan and i never sent it back so m y new rate be 3.5% if i get letter reissued.
Click to expand...
Does the letter give a deadline for sending it back. If so, what is it?

Have you considered sending it back anyway and hoping for the best? One downside to doing this is that they might put you on the 3.5% 5-year fixed rate, and if you break out of that rate in two months or so to switch lenders there could be a break fee, so tread carefully.
 
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Shane1883 said:
Current lender: ICS
Outstanding mortgage balance (how much you still owe): 336k
Approximate current value of your property: 591k
The date you started your fixed-rate mortgage (month and year): NOV 2022
How many years you fixed for: 3
Your current mortgage interest rate: 3.75%
Your current monthly repayment (excluding any over payments): 1,560.30 (30 yrs)
Your property's BER (Building Energy Rating): A3
Are you due to get extra cashback from your current lender in the future: No
Did you use a broker when you took out your current mortgage? Yes
Click to expand...
@Shane1883 Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with ICS. Note: it is possible that your break fee will be higher than zero because ICS Mortgages are a non-bank lender. I would be grateful if you could post your break fee quote here when you receive it, including the date of the letter.
  • Switching immediately to Haven's 4-year green fixed rate (3.0% with €2,000 cashback) will save you about €14,200 over the next 4 years
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Bank of Ireland's 4-year green fixed rate (2.9% with no cashback) will save you about €13,520 over the next 4 years
    • Note that Bank of Ireland discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • So if you switch to them now, you will not be eligible to switch to one of their low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).

  • Switching immediately to AIB's 5-year green fixed rate (3.15% with €2,000 cashback) will save you about €12,240 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)
    • For the same reason, it is unlikely that there will be a break fee if you break out of this fixed rate to move home within the next few years

  • Switching immediately to Bank of Ireland's 7-year green fixed rate (3.25% with no cashback) will save you about €8,920 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • The same warnings as above regarding higher Bank of Ireland rates in the future apply

  • Switching immediately to Haven's 7-year fixed rate (3.65% with €5,000 cashback) will save you about €8,640 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Haven's 10-year fixed rate (3.85% with €5,000 cashback) will save you about €5,980 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Bank of Ireland's 10-year green fixed rate (4.0% with €6,720 cashback) will save you about €5,720 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • The same warnings as above regarding higher Bank of Ireland rates in the future apply

  • Switching immediately to AIB's 7-year fixed rate (4.05% with €2,000 cashback) will save you about €340 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 (4.2% with €2,000 cashback) will leave you worse off by about €1,660 over the next 4 years – but with the longer security of 10 years on a fixed rate

These savings estimates use for comparison the scenario of switching to a 4.75% rate with ICS when the current fixed rate ends. And that's assuming that ICS are even offering a 4.75% rate in November 2025 – 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.

As you know, BOI will normally only let you switch to them if you have been with your current lender for at least 12 months, but ask them if they will waive this requirement.

In the case of AIB, the requirement is only 6 months with your current lender. Contact them and ask them if they will let you start the switch now and draw down in ~3 months. Ask them if they will waive the requirement altogether.

It is not known if Haven have a requirement like this. Contact a Haven broker to find out (and please post their answer here).

I have not included estimates for other lenders because they have a requirement of 12 months with your current lender.

Bear in mind that the interest rates of some lenders are very likely to 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).

Dates of the most-recent interest rate increases:
  • Bank of Ireland: 24th January 2023 and 10th November 2022
  • Permanent TSB: 13th January 2023 and 18th November 2022
  • Avant: 8th December 2022, 15th August 2022 and 16th May 2022
  • AIB, EBS and Haven: 25th November 2022 and 14th October 2022

Shane1883 said:
Do brokers claw back if you switch too soon?
Click to expand...
As @RedOnion says, some (perhaps many) of them do. But if this clawback was not in the contract you entered into with them, they can't enforce it against you. Find the contract, Ts&Cs and terms of business of the broker and read them carefully.
 
Paul F said:
@Keengardener1 Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Bank of Ireland. If it is higher than zero, please post it here when you receive it, including the date of the letter.
  • Switching immediately to Permanent TSB's 5-year green fixed rate (3.2% with €6,340 initial cashback and 2% monthly cashback) will save you about €9,160 over the next 4 years
    • Note that Permanent TSB's interest rates have usually been much higher than other lenders over the past several years. If this pattern continues, switching to Permanent TSB will cost you a lot more than a cheaper lender over the long term (even accounting for the cashback)
    • So if you switch to them now, you may want to switch again to another lender in the future, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated)

  • Switching immediately to Haven's 4-year green fixed rate (3.0% with €2,000 cashback) will save you about €5,860 over the next 4 years
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to AIB's 5-year green fixed rate (3.1% with €2,000 cashback) will save you about €4,660 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)
    • For the same reason, it is unlikely that there will be a break fee if you break out of this fixed rate to move home within the next few years
    • You would need a house valuation of €634k or higher, or you would need to make a ~€17k overpayment, to be eligible for this rate. Otherwise the rate would be 3.15%.

  • Switching immediately to Bank of Ireland's 5-year fixed rate (3.5% and you would get the 1% (€3,600) 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).

  • Switching immediately to Permanent TSB's 7-year fixed rate (3.8% with €6,340 initial cashback and 2% monthly cashback) will save you about €1,980 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • The same warnings as above regarding higher Permanent TSB rates in the future apply

  • Switching immediately to Haven's 7-year fixed rate (3.65% with €5,000 cashback) will save you about €1,000 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Bank of Ireland's 10-year fixed rate (3.8% and you would get the 1% (€3,600) cashback) will leave you worse off by about €920 over the next 4 years – but with the longer security of 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to Avant Money's 4-year fixed rate (3.4% with no cashback) will leave you worse off by about €1,000 over the next 4 years

  • Switching immediately to Haven's 10-year fixed rate (3.85% with €5,000 cashback) will leave you worse off by about €1,440 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Avant Money's 5-year fixed rate (3.65% with no cashback) will leave you worse off by about €4,040 over the next 4 years

  • Switching immediately to AIB's 7-year fixed rate (3.95% with €2,000 cashback) will leave you worse off by about €5,660 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 (4.1% with €2,000 cashback) will leave you worse off by about €7,480 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 (3.95% with no cashback) will leave you worse off by about €7,680 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Avant Money's "One Mortgage" (a 4.3% fixed rate with no cashback) will leave you worse off by about €11,960 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term (approximately 21 years)

These savings estimates use for comparison the scenario of switching to a 4% rate with Bank of Ireland when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 4% rate in December 2023 – it could be higher (or lower). You would get the Bank of Ireland €3,600 future cashback in such a scenario, and the savings estimates account for this. The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

All of Avant's rates 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).

Bear in mind that the interest rates of some lenders are very likely to 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).

Dates of the most-recent interest rate increases:
  • Bank of Ireland: 24th January 2023 and 10th November 2022
  • Permanent TSB: 13th January 2023 and 18th November 2022
  • Avant: 8th December 2022, 15th August 2022 and 16th May 2022
  • AIB, EBS and Haven: 25th November 2022 and 14th October 2022


The above estimates assume that you do not pay a lump sum off your mortgage while switching and that you consider €1,683 to be your normal monthly repayment.

Overpaying your mortgage/reducing your balance may not be the best use of your money. Your priorities should usually be:
  • Paying off expensive debt (credit cards, personal loans, car loans, etc.)
  • Building up an emergency fund in a savings/current account (3 to 6 months' living expenses)
  • Saving money for any expenses you will have over the next few years (kids; buying a car; childcare; home renovations; adult children going to college, etc.)
  • Maxing out your pension contributions (very large tax relief is given)
  • Overpaying your mortgage
in approximately that order. Consider posting a thread about your situation in the Money Makeover forum.


Does the letter give a deadline for sending it back. If so, what is it?

Have you considered sending it back anyway and hoping for the best? One downside to doing this is that they might put you on the 3.5% 5-year fixed rate, and if you break out of that rate in two months or so to switch lenders there could be a break fee, so tread carefully.
Click to expand...
thank you Paul for such a comprehensive reply , i have sent my form back to PTSB BOI which showed the 3% 5 year Fixed rate. If they don't accept I will move to AIG green rate . I have applied online and received AIP . My financial outlook is strong and both myself and partner are in secure employment .
 
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Paul F said:
@Shane1883 Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with ICS. Note: it is possible that your break fee will be higher than zero because ICS Mortgages are a non-bank lender. I would be grateful if you could post your break fee quote here when you receive it, including the date of the letter.
  • Switching immediately to Haven's 4-year green fixed rate (3.0% with €2,000 cashback) will save you about €14,200 over the next 4 years
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Bank of Ireland's 4-year green fixed rate (2.9% with no cashback) will save you about €13,520 over the next 4 years
    • Note that Bank of Ireland discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • So if you switch to them now, you will not be eligible to switch to one of their low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).

  • Switching immediately to AIB's 5-year green fixed rate (3.15% with €2,000 cashback) will save you about €12,240 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)
    • For the same reason, it is unlikely that there will be a break fee if you break out of this fixed rate to move home within the next few years

  • Switching immediately to Bank of Ireland's 7-year green fixed rate (3.25% with no cashback) will save you about €8,920 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • The same warnings as above regarding higher Bank of Ireland rates in the future apply

  • Switching immediately to Haven's 7-year fixed rate (3.65% with €5,000 cashback) will save you about €8,640 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Haven's 10-year fixed rate (3.85% with €5,000 cashback) will save you about €5,980 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Bank of Ireland's 10-year green fixed rate (4.0% with €6,720 cashback) will save you about €5,720 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • The same warnings as above regarding higher Bank of Ireland rates in the future apply

  • Switching immediately to AIB's 7-year fixed rate (4.05% with €2,000 cashback) will save you about €340 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 (4.2% with €2,000 cashback) will leave you worse off by about €1,660 over the next 4 years – but with the longer security of 10 years on a fixed rate

These savings estimates use for comparison the scenario of switching to a 4.75% rate with ICS when the current fixed rate ends. And that's assuming that ICS are even offering a 4.75% rate in November 2025 – 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.

As you know, BOI will normally only let you switch to them if you have been with your current lender for at least 12 months, but ask them if they will waive this requirement.

In the case of AIB, the requirement is only 6 months with your current lender. Contact them and ask them if they will let you start the switch now and draw down in ~3 months. Ask them if they will waive the requirement altogether.

It is not known if Haven have a requirement like this. Contact a Haven broker to find out (and please post their answer here).

I have not included estimates for other lenders because they have a requirement of 12 months with your current lender.

Bear in mind that the interest rates of some lenders are very likely to 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).

Dates of the most-recent interest rate increases:
  • Bank of Ireland: 24th January 2023 and 10th November 2022
  • Permanent TSB: 13th January 2023 and 18th November 2022
  • Avant: 8th December 2022, 15th August 2022 and 16th May 2022
  • AIB, EBS and Haven: 25th November 2022 and 14th October 2022


As @RedOnion says, some (perhaps many) of them do. But if this clawback was not in the contract you entered into with them, they can't enforce it against you. Find the contract, Ts&Cs and terms of business of the broker and read them carefully.
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Amazing reply Paul, thank you. For the ICS break fee I have the formula they use here: https://uploads.icsmortgages.ie/gen...kage_Fee_Policy_08.12.21.pdf?mtime=1638973930
If I get any quote from them I will let you know. I'd switch before that 4.75 kicked in, taking BOI at 2.9% for 3 years it would be a savings of 160 pm, or €5,760 for 3 years, ignoring months that will pass. If the solicitor fee is the same, I'll end up paying €1200 + vat + valuation, so say €1600. If my broker wants to claw back €3k, i'd make €1k over 3 years or €4k without, must see that contract. If they claim it back it's probably not worth the effort, especially seeing as rates may increase by then.
 
Shane1883 said:
For the ICS break fee I have the formula they use here: https://uploads.icsmortgages.ie/gen...kage_Fee_Policy_08.12.21.pdf?mtime=1638973930
If I get any quote from them I will let you know.
Click to expand...
Because the 3-year swap rate is currently close to the level it was at in November, it is possible that there will be a break fee. (It depends on when exactly in November you drew down your mortgage.)

And even if they send you a break fee quote of zero now, there could be a break fee by the time you complete the switch to another lender. Keep an eye on that swap rate. If it increases from today's level, the break fee will be zero. If it decreases sufficiently, there will be a break fee.

Shane1883 said:
taking BOI at 2.9% for 3 years it would be a savings of 160 pm, or €5,760 for 3 years, ignoring months that will pass.
Click to expand...
You should never look at reductions in monthly repayments when working out what your savings would be. See this thread to understand why. You would actually save about €336000*0.85/100*3 = €8,570 over the next three years if you were able to switch to BOI right now. That's before solicitors' fees and assuming no broker clawback.

If we assume solicitors' fees of €1,300 and no broker clawback, that's a saving of about €7,270 over the next three years.
 
Hi Paul,

I'd love your thoughts on my situation as follows please: I'm well into my fixed rate period and I'm just not sure if I have better options available to me now...other than sticking it out with PTSB (following the recent transfer of my balance from UB)

Current lender: PTSB - it recently transferred from Ulster Bank
Outstanding mortgage balance (how much you still owe): 333,000
Approximate current value of your property: 500,000
The date you started your fixed-rate mortgage (month and year): 24/05/2017
How many years you fixed for: 7 yrs.
Your current mortgage interest rate: 3.99%
Your current monthly repayment (excluding any over payments): 1,923.07 (28 yrs)
Your property's BER (Building Energy Rating): C1
Are you due to get extra cashback from your current lender in the future: No
Did you use a broker when you took out your current mortgage? No

Many Thanks
DW
 
DylanWilko111 said:
Current lender: PTSB - it recently transferred from Ulster Bank
Outstanding mortgage balance (how much you still owe): 333,000
Approximate current value of your property: 500,000
The date you started your fixed-rate mortgage (month and year): 24/05/2017
How many years you fixed for: 7 yrs.
Your current mortgage interest rate: 3.99%
Your current monthly repayment (excluding any over payments): 1,923.07 (28 yrs)
Your property's BER (Building Energy Rating): C1
Are you due to get extra cashback from your current lender in the future: No
Did you use a broker when you took out your current mortgage? No
Click to expand...
@DylanWilko111 Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Permanent TSB. If it is higher than zero, please post it here when you receive it, including the date of the letter.
  • Switching immediately to AIB's 4-year fixed rate (3.2% with €2,000 cashback) will save you about €5,740 over the next 4 years

  • Switching immediately to Bank of Ireland's 4-year fixed rate (3.2% with no cashback) will save you about €3,740 over the next 4 years
    • Note that Bank of Ireland discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • So if you switch to them now, you will not be eligible to switch to one of their low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).

  • Switching immediately to Haven's 7-year fixed rate (3.65% with €5,000 cashback) will save you about €2,980 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Permanent TSB's 5-year fixed rate (3.5% with no cashback) will save you about €1,360 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 Avant Money's 4-year fixed rate (3.45% with no cashback) will save you about €520 over the next 4 years

  • Switching immediately to Haven's 10-year fixed rate (3.85% with €5,000 cashback) will save you about €420 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • Warning: it takes a long time to complete a switch to Haven, in the experience of some users of this site

  • Switching immediately to Bank of Ireland's 7-year fixed rate (3.55% with no cashback) will leave you worse off by about €740 over the next 4 years – but with the longer security of 7 years on a fixed rate
    • 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 (3.7% with no cashback) will leave you worse off by about €2,680 over the next 4 years

  • Switching immediately to Bank of Ireland's 10-year fixed rate (4.3% with €6,660 cashback) will leave you worse off by about €3,700 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • The same warnings as above regarding higher Bank of Ireland rates in the future apply

  • Switching immediately to Permanent TSB's 7-year fixed rate (3.9% with no cashback) will leave you worse off by about €3,760 over the next 4 years – but with the longer security of 7 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to AIB's 7-year fixed rate (4.05% with €2,000 cashback) will leave you worse off by about €5,140 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to Avant Money's 7-year fixed rate (4.0% with no cashback) will leave you worse off by about €6,540 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 (4.2% with €2,000 cashback) will leave you worse off by about €7,080 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 4.35% fixed rate with no cashback) will leave you worse off by about €11,040 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term (approximately 22 years)

These savings estimates use for comparison the scenario of switching to a 3.4% rate with Permanent TSB when the current fixed rate ends. And that's assuming that Permanent TSB are even offering a 3.4% rate in May 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 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).

Bear in mind that the interest rates of some lenders are very likely to 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).

Dates of the most-recent interest rate increases:
  • Bank of Ireland: 24th January 2023 and 10th November 2022
  • Permanent TSB: 13th January 2023 and 18th November 2022
  • Avant: 8th December 2022, 15th August 2022 and 16th May 2022
  • AIB, EBS and Haven: 25th November 2022 and 14th October 2022
Even though it is usually quick to re-fix with your current lender, it is still possible for rates to rise while you are in the middle of the process, which could potentially leave you worse off than if you had done nothing. Ask Permanent TSB if they will guarantee today's rates for you if you start the process of re-fixing with them.
 
Thank you very much for the incredibly detailed response!

I do my day to day banking with AIB (salary is paid into my current account with them) and so the first option in your email looks very interesting (AIB).

I will let you know what PTSB say about the break fee, of course.

Could I ask you what’s your thoughts are on Credit Union mortgages ?
I’m a member of MFCU (Members First Credit Union)
They advertise 3.2% fixed rate on their website (5 year). APRC 3.25%
I could be mistaken, but at first glance, that rate looks very competitive - but perhaps I am missing something?!

Again, you’re post is very much appreciated.

DW
 
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