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

That is indeed a good rate. But I'm not familiar with Credit Union mortgages at all and if there are any other costs and/or Ts&Cs.

Do different Credit Unions offer different rates? Maybe start a new thread with your questions.
 
Hi @Paul F

So I have yet to receive the loan offer letter from PTSB but it's in the post.....They will re-issue it but today they were able to tell me on the phone the following options are available based on when I first called on the 10th Jan (i.e. prior to the their last rate increase announced on 13th Jan)

3.7% Variable
3.35% 2 Year fixed
2.65% 3 Year fixed
2.95% 5 Year fixed
3.65% 7 Year fixed
2.8% Green 5 Year fixed (B3 Cert required)

I am thinking of going with 2.95% 5 Year fixed. Any thoughts?

My feeling is that rates will rise for say another 12 months and plateau probably for 12-24 months and if they do fall subsequently we can explore the options at that point or wait for the 5 year fixed to finish.
 
aam514 said:
I am thinking of going with 2.95% 5 Year fixed. Any thoughts?
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Are you sure you are eligible for this rate? It was only available to borrowers with a mortgage balance of €250k or higher, but you said that your balance is €240k. If you are eligible for it, it is a very good rate. Here are most of the current rates across the different lenders. (Look at the LTV<60% table.)

Based on the fact that they quoted the green rate over the phone even though you are not eligible for it, I suspect that you won't be eligible for the 2.95% 5-year fixed rate either. If you aren't, the 2.65% 3-year fixed rate looks good (although it's quite a short fixed period).

aam514 said:
My feeling is that rates will rise for say another 12 months and plateau probably for 12-24 months and if they do fall subsequently we can explore the options at that point or wait for the 5 year fixed to finish.
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It's impossible to know, or even to guess confidently, what will happen with rates.

You said that you called PTSB on 10th January. You are probably only eligible for the old, pre-increase rates until about 9th Feb, so whatever you decide to do, act quickly.
 
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Hi Paul,

Just to update you on the above.
I managed to move to AIB's 2.1 % before the ECB hikes kicked in. There was no breakage fee for transferring.

However, my mortgage had moved to PTSB for about a week before transferring to AIB. So, my mortgage was redeemed from PTSB in the end.
PTSB took two payments from me (Dec and Jan), which I believe they shouldn't have. Reason being they took more than 21 business days to provide redemption figures (according to Central Bank regulations they should be provided within 5 business days).

Do you know where I stand in regards requesting a refund from PTSB given the delay in providing redemption figures? Have you any advice on this please?

Kind regards,

Norma
 
Thanks @Paul F hopefully I will get this letter soon. That's a good point about them offering the green rate even though I'm not eligible so with that in mind I'm not sure if they are actually able to offer the 2.95% for my balance of 240k. The lady I spoke to did also say that they would be flexible on the 30 days if the bank is the source of the delay which they are so far. But again another reason to hope we will get the letter soon!
 
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You should get a final mortgage statement (right up to the redemption) from PTSB and study it very closely to try to understand whether or not you are owed a refund.
 
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Hi Paul. My very low fixed rate expires in 6 months, and with the constant ECB rate rises atm I’m not sure what to do and when to do it. Our current provider is now the dearest of all, so I think I’ll need to switch, but no idea whether to go variable or fixed, and whether to do it now or wait til it expires? Will I be hit with a break fee? I’m not very knowledgeable with this sort of stuff so appreciate any advice, thanks.

Current lender: Finance Ireland
Outstanding mortgage balance (how much you still owe): €130,000
Approximate current value of your property: €230,000
The date you started your fixed-rate mortgage (month and year): 01/09/2020
How many years you fixed for: 3 yrs
Your current mortgage interest rate: 2.40%
Your current monthly repayment (excluding any over payments): €591.88 (28 yrs)
Your property's BER (Building Energy Rating): UNKNOWN
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
 
@AayJay Your break fee should be zero at the moment – but confirm it with Finance Ireland.
  • Switching immediately to Permanent TSB's 5-year fixed rate (3.6% with €2,600 initial cashback and 2% monthly cashback) will save you about €8,760 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 Permanent TSB's 7-year fixed rate (3.8% with €2,600 initial cashback and 2% monthly cashback) will save you about €7,760 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 Avant Money's 4-year fixed rate (3.4% with no cashback) will save you about €6,780 over the next 4 years

  • Switching immediately to Bank of Ireland's 5-year fixed rate (4.0% with €2,600 cashback) will save you about €6,380 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 Avant Money's 5-year fixed rate (3.65% with no cashback) will save you about €5,520 over the next 4 years

  • Switching immediately to AIB's 4-year fixed rate (4.15% with €2,000 cashback) will save you about €5,020 over the next 4 years

  • Switching immediately to Bank of Ireland's 10-year fixed rate (4.3% with €2,600 cashback) will save you about €4,860 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 5-year fixed rate (4.2% with €2,000 cashback) will save you about €4,760 over the next 4 years

  • Switching immediately to Avant Money's 7-year fixed rate (3.95% with no cashback) will save you about €4,000 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to AIB's 7-year fixed rate (4.4% with €2,000 cashback) will save you about €3,740 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 (4.55% with €2,000 cashback) will save you about €2,980 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 4.3% fixed rate with no cashback) will save you about €2,220 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term (approximately 24 years)

  • Switching immediately to Finance Ireland's 5-year fixed rate (5.5% with no cashback) will leave you worse off by about €2,620 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

These savings estimates use for comparison the scenario of switching to a 5.5% rate with Finance Ireland when the current fixed rate ends. And that's assuming that Finance Ireland are even offering a 5.5% rate in September 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 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 your loan-to-value ratio (LTV) really is below 60% so that you are eligible for the listed rates. Your LTV estimate is 130.0k/230.0k = 56.5%. If you get a valuation of less than €217k, you will need to make a few more monthly mortgage payments and/or a lump sum overpayment to get the LTV below 60%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.

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:
  • AIB and Haven: 2nd February 2023 (fixed rates), 25th November 2022 and 14th October 2022
  • 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
  • EBS: 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 Finance Ireland if they will guarantee today's rates for you if you start the process of re-fixing with them.

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

AayJay said:
Did you use a broker when you took out your current mortgage? No
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Really? I thought you could only get a Finance Ireland mortgage by going through a broker.

If you used a broker when you got your current mortgage, they may seek to claw back their lost commission from you – but they can only do that if this clawback was part of their contract with you, and in any case it's probably only a few hundred quid.

If you're going to switch to another lender you should do it ASAP because lenders are likely to keep increasing their rates.

If you decide just to re-fix with Finance Ireland at 5.5% for five years (probably not a good idea), it's difficult to say whether you should do so immediately or wait a few months. Each month you wait will save you money (about €335), but if Finance Ireland put up their rates that could more than wipe out those savings.
 
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Hi there. I got a good fixed rate on a 3 year deal and have just under a year remaining. With the large increases around, I'm wondering if I should be trying to plan a little ahead. Could you please advise me of my best options? Thanks!

  • Current lender AIB
  • Outstanding mortgage balance €175,000
  • Approximate current value of your property €395,000
  • The date you started your fixed-rate mortgage (month and year) Jan 2021
  • How many years you fixed for 3
  • Your current mortgage interest rate 2.35%
  • Your current monthly repayment €752
  • Your property's BER F
  • Are you due to get extra cashback from your current lender? No, however I do receive free bank charges, approx €140/year
  • Did you use a broker when you took out your current mortgage? No, direct with the bank
 
Hi Paul

Just a quick update:
- the PTSB letter arrived with €0 break fee on it as you predicted.
- their letter also offers a 3.5% 5 yr fixed rate (71% LTV) which would see an immediate reduction in my monthly repayment (thank you!!!!)
It’s tempting!

Per your reply, I stared inputting documents into the AIB mortgage hub with a view to getting an offer from them, but I think I’ve missed the boat on their 3.2% rate.

I’m currently in talks with my credit union - their website still offers 3.2% 5 year fixed -
I’ll let you know how I get on.

Again, thank you so much for your guidance

Dylan
 
DylanWilko111 said:
I’m currently in talks with my credit union - their website still offers 3.2% 5 year fixed -
I’ll let you know how I get on.
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Don't spend too long talking to the credit union if you are seriously thinking about re-fixing on PTSB's 5-year rate. PTSB could put it their rates again quite soon. And it might take you three months to switch your mortgage to the credit union, during which time they could put up their rates, and they would apply those increases to you.
 
@timbob Your break fee should be zero at the moment – but confirm it with AIB. 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 fixed rate (3.6% with €3,500 initial cashback and 2% monthly cashback) will save you about €2,780 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 Permanent TSB's 7-year fixed rate (3.8% with €3,500 initial cashback and 2% monthly cashback) will save you about €1,420 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 EBS's 5-year fixed rate (3.75% with €3,500 cashback) will save you about €1,200 over the next 4 years
    • But they might put up their rates very soon

  • Switching immediately to Avant Money's 4-year fixed rate (3.4% with no cashback) will save you about €60 over the next 4 years

  • Switching immediately to Avant Money's 5-year fixed rate (3.65% with no cashback) will leave you worse off by about €1,640 over the next 4 years

  • Switching immediately to Bank of Ireland's 10-year fixed rate (4.3% with €3,500 cashback) will leave you worse off by about €2,560 over the next 4 years – but with the longer security of 10 years on a fixed rate
    • 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 4-year fixed rate (4.05% with no cashback) will leave you worse off by about €3,040 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to AIB's 5-year fixed rate (4.1% with no cashback) will leave you worse off by about €3,400 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

  • Switching immediately to Avant Money's 7-year fixed rate (3.95% with no cashback) will leave you worse off by about €3,700 over the next 4 years – but with the longer security of 7 years on a fixed rate

  • Switching immediately to AIB's 7-year fixed rate (4.25% with no cashback) will leave you worse off by about €4,420 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 10-year fixed rate (4.4% with no cashback) will leave you worse off by about €5,460 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 "One Mortgage" (a 4.3% fixed rate with no cashback) will leave you worse off by about €6,100 over the next 4 years – and the interest rate will be fixed for the remainder of your mortgage term (approximately 26 years)

These savings estimates use for comparison the scenario of switching to a 4.05% rate with AIB when the current fixed rate ends. And that's assuming that AIB are even offering a 4.05% 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 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:
  • AIB and Haven: 2nd February 2023 (fixed rates), 25th November 2022 and 14th October 2022
  • 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
  • EBS: 25th November 2022 and 14th October 2022
If you use a broker and they tell you that your mortgage balance is too low to switch, find another broker.
 
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Ok Thank you Paul
The PTSB letter gives me 30 days to take the 3.5% rate.
So I’ll spend the next week trying to finalise things with the CU and lock in a Letter of Offer from them at 3.2%.

Thanks
Dylan
 
DylanWilko111 said:
The PTSB letter gives me 30 days to take the 3.5% rate.
So I’ll spend the next week trying to finalise things with the CU and lock in a Letter of Offer from them at 3.2%.
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Unless you're far along in the process with the credit union already, I'd say it's unlikely that you'll get a letter of offer within the next 4 weeks. And even if you do, there is no guarantee that they will let you have the 3.2% rate if they increase their rates after they issue the letter of offer to you.

By all means take a week or so to try to get a letter of offer. Just remember that that letter doesn't guarantee you the 3.2% rate.
 
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Hi Paul
Thank you. The letter of offer arrives tomorrow.
Here’s something I don’t understand and I’d love your help: why doesn’t the letter of offer guarantee the rate on that letter?
I thought the purpose of the letter of offer was to set the proposed terms of MY potential loan in writing (amount, rates, repayment plan)….before the solicitors go and do their stuff.
If the lender can subsequently change the rates that will apply to my loan, then why issue the letter of offer in the first place? Why is it subject to change?
I’m sure I’m misunderstanding the reason for the letter of offer and what it guarantees me…but it seems like it defeats the purpose of the ‘letter of offer’ if the loan itself is still subject to unpredictable changes right up to the date of drawdown.
Thank you!
Dylan
 
DylanWilko111 said:
The letter of offer arrives tomorrow.
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First of all, are you talking about a letter of offer (a formal loan offer) and not merely approval in principle?

Another poster asked similar questions to yours in the following thread. Feel free to resurrect that thread to comment or to ask a question if it hasn't already been addressed.

Why is the Letter of Offer important?

Hi there, Curious question: if a Letter of Offer for a mortgage doesn't guarantee you anything (as the bank can, at any point, decide not to honour what is on the Letter) nor does it guarantee anything to the bank (as you can have multiple Letters and can choose at any time to abandon the...
www.askaboutmoney.com
 
Hi Paul
Yes, I’m talking about a formal letter of offer.
The loan application was approved very quickly early this week pending the valuation which they received today. Its been fully been signed off by their board and the credit union promised to release the letter of offer early tomorrow. I spoke to them earlier this evening - they wanted to send the letter of offer directly to their solicitor to deal with my solicitor. On our call they made the same noises as you…’the rate could change before actual drawdown’. I couldn’t get my head around it - I asked then if they can guarantee the 3.2% for a specific timeframe and they said they’d come back to me.
Then I checked on here and I saw you making the same point as them.

Thanks for the links - I’ll check them out now.
Dylan
 
Reading those links, I probably placed too much importance on the Letter of Offer!

Their Letter of Offer will say 3.2% tomorrow…but it’s looking more likely that rate won’t be honoured by them if they decide to increase their rates by the time I drawdown…

Its a risky race against the clock….and it risks the current offer from TSB timing out in the meantime… and incurring legal fees for potentially a worse deal.
(It goes back to the valid points you were making earlier!)

Thanks again…
Dylan
 
DylanWilko111 said:
Their Letter of Offer will say 3.2% tomorrow…but it’s looking more likely that rate won’t be honoured by them if they decide to increase their rates by the time I drawdown…
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Note that all of the mainstream lenders gave 30 days' grace (and PTSB gave 90 days) when they increased their rates over recent months. That is to say, anybody who received a letter of offer from the lender before they increased their rates was allowed 30 more days to draw down at the old rate. But there is no guarantee that the credit union will do the same.

Did the credit union talk about needing to have your mortgage protection policy re-assigned from PTSB to them? I believe that it is the credit union's responsibility to contact the insurance company to instruct them to re-assign the life policy.

Did they mention needing to have their interest noted on your home insurance?

DylanWilko111 said:
I asked then if they can guarantee the 3.2% for a specific timeframe and they said they’d come back to me.
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Try to pin them down on this if you can.
 
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