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

Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with BOI (and please post it here when you receive it).
  • Switching immediately to Haven's 4-year fixed green rate (2.0% with €2,000 cashback) will save you about €9,400 over the next four years
  • Switching immediately to Avant's 7-year fixed rate (1.95% with no cashback) will save you about €7,950 over the next four years – but with the longer security of 7 years on a fixed rate
These savings estimates use as a baseline the scenario of immediately breaking out of your current BOI fixed rate and re-fixing for another 5 years at 3% (in order to "reset the clock"). The estimates also account for fees and the €3,200 BOI cashback.

If you're feeling brave, you could consider the strategy outlined in this thread: switch to Haven's 2.35% 3-year fixed rate and get the €5k cashback. Then quickly switch to Haven's 2.0% green rate. If it works, you will be better off by about €12,400 in four years' time. Nobody knows for sure if Haven will allow you to do this, so you might be stuck on the 2.35% rate, but at least you'd have got the €5k cashback.

If you're prepared to settle for smaller savings in exchange for a longer fixed rate, consider Avant's 2.1% rate, fixed for 10 years.
 
Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it again with BOI when you get closer to completing any switch.
  • Switching immediately to KBC's 5-year fixed rate (2.4% with €3,000 cashback) will save you about €3,900 over the next five years
This savings estimate assumes your monthly payment is typically €1,400 and uses as a baseline the scenario of immediately breaking out of your current BOI fixed rate and re-fixing for another 5 years at 3% (in order to "reset the clock"). The estimate also accounts for fees and the KBC cashback.

In either scenario (switching or not), any overpayments will save you interest. But KBC allows you to make large overpayments without penalty (overpayments of €2,240 per year over each of the next five years in your case, I believe), whereas BOI might charge you a penalty.

You mentioned in the other thread that your wife is on probation in work. I would suggest that you continue with the switching process and see if this is a dealbreaker or not. Only engage the services of a conveyancing solicitor once KBC confirm that it is not a problem.
 
Last edited:
Your break fee should be around €90 at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it again with BOI when you get closer to completing any switch.
  • Switching immediately to AIB's 5-year fixed rate (2.35% with €2,000 cashback) will save you about €4,830 over the next five years
  • Switching immediately to Avant's 7-year fixed rate (1.95% with no cashback) will save you about €5,370 over the next five years – bigger savings and the longer security of 7 years on a fixed rate
These savings estimates use as a baseline the scenario of immediately breaking out of your current BOI fixed rate and re-fixing for another 5 years at 3% (in order to "reset the clock"). The estimates also account for fees and cashback.

If you're prepared to settle for smaller savings in exchange for a longer fixed rate, consider Avant's 2.1% rate, fixed for 10 years.

Is there any chance that your BER is B3 or higher?
 

Thanks for the answer. Ber wouldn't be great I'd imagine house built in the 70s.
 
Any help appreciated. Thanks

Current lender: ICS
Outstanding mortgage balance: 250k
Approximate value of your property: 320k
The date you started your fixed-rate mortgage: Oct 2020
How many years you fixed for: 5
Your current mortgage interest rate: 2.6%
Your current monthly repayment: 937 approx
Your property's BER: A2
Are you due to get extra cashback from your current lender in the future: No.
 
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 (and please post it here when you receive it).
  • Switching immediately to Avant Money's 7-year fixed rate (2.05% with no cashback) will save you about €2,690 over the next 4 years
This savings estimate uses as a baseline the scenario of staying with PTSB and moving onto their 2.95% rate when the current fixed rate is up. And that's assuming that PTSB are even offering a 2.95% rate in one year – it could be higher (or lower). The estimate also accounts for fees and the monthly PTSB cashback.

If you're prepared to settle for smaller savings in exchange for a longer fixed rate, consider Avant's 2.2% 10-year fixed rate.

Regarding whether or not to make an overpayment to get your LTV under 60%, it seems that you "only" need to make a €13k lump sum overpayment (not €24k) to achieve this. If you did so you'd be eligible for Avant Money's 1.95% 7-year fixed rate, which would mean you would pay about €900 less in interest over the next 4 years (versus the 2.05% rate). You'd also be eligible for Avant Money's 2.1% 10-year fixed rate.

If you're thinking about making this overpayment:
  • First, get your property valued by Avant as part of the switching process to see how much of an overpayment you would need to make and see if it is still feasible. (It could be higher or lower than the current €13k estimate.)
  • Make sure that you are left with enough savings to have an emergency fund (3 to 6 months' living expenses) and to cover any planned large expenses over the next few years
 
Last edited:
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 (and please post it here when you receive it).
  • Switching immediately to Ulster Bank's 4-year green rate (2.25%) will save you about €400 over the next year versus staying on your current rate – and is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed)
Of course, if you decide to stay with Ulster Bank and switch to their 2.25% rate, you will probably want to switch again in 4 years when your fixed rate expires and your mortgage moves onto PTSB's books, at which point you will be subject to their (probably higher) interest rates.
  • Switching immediately to Haven Mortgages Limited's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €1,700 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will leave you worse off by about €110 over the next 4 years – but with the longer security of 7 years on a fixed rate
These savings estimates use as a baseline the scenario of immediately breaking out of your current Ulster Bank fixed rate and re-fixing with them for 4 years on their 2.25% green rate. The savings are even higher when you use a baseline of doing nothing. The estimates also account for fees and cashback.

Note: the Avant savings estimate assumes that you are not eligible for the €1,500 cashback. To be eligible, the switch to Avant has to be underway before the end of March and you must use a broker who is an Avant "Gold Partner". I don't know what "underway" means but if you are inclined to try to beat the deadline you could talk to an Avant Gold Partner as soon as possible and see if it is possible.

If you're prepared to take a bigger upfront cost in the short/medium term in exchange for an even longer fixed rate, consider Avant's 2.1% 10-year fixed rate.
 
My estimate of your break fee is €820, so you may have done something wrong in your calculations. Anyway, let's use the €538 break fee that Haven quoted you.
  • Switching immediately to Haven's 4-year green rate (2.0%) will save you about €1,275 over the next year versus staying on your current rate, and that's even after paying the break fee. And is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
If you're prepared to settle for smaller savings in exchange for a longer fixed rate, consider Avant's 1.95% rate, fixed for 7 years. It will leave you worse off by about €1,000 over the next four years (versus the immediate switch to the Haven 2.0% rate), and that's after accounting for fees – but with the longer security of 7 years on a fixed rate. And Avant's 10-year 2.1% rate will leave you worse off by about €1,850 over the next four years (versus the immediate switch to the Haven 2.0% rate) – but with even longer security.
 
  • Current lender AIB
  • Outstanding mortgage balance (how much you still owe) €77000
  • Approximate value of your property€450000
  • The date you started your fixed-rate mortgage (month and year) May2021
  • How many years you fixed for 5
  • Your current mortgage interest rates2.35%
  • Your current monthly repayment (excluding any overpayments)€909
  • Your property's BER (Building Energy Rating) – estimated if necessary not sure maybe 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 and when? no
Basically I have the option of getting a €12000 cheque from family this year and next year to pay off mortgage. So €24000 in total this year and next. But can't currently pay it off the mortgage so just wondering if we should break our current contract and pay the €12000 and refix again. If rates don't rise in the next 12/18 months we could do the same next year. We paid €12000 lump sum last year before we fixed and brought the loan from 10 years to 8.5 so I assume we could reduce term by another 1.5/2 years now. Current term is now just over 7 years having paid this past year.
 
@Cathbarr As discussed in the other thread, your break fee should be zero at the moment, which you will get confirmation of from AIB shortly.

Technically, your biggest savings over the next five years would come from switching to KBC's five-year fixed rate (2.4% with €3,000 cashback) – savings of about €1,400 after fees and cashback. But I'm assuming you don't want to change lender. (Switching to KBC would also limit the amount you can overpay by.)

Because your break fee is zero, you can overpay by any amount without penalty. You don't have to break and re-fix to do this. But I would recommend asking AIB for an updated break fee just before you plan to make any overpayment, just in case it has increased.

Separately, you should also try to figure out if your BER really is B3 or higher. (Check if your property already has a BER cert.) Maybe look for old ads of recent house sales if your neighbours' houses are very similar to yours. Or ask your neighbours. A B3 or better rating would let you switch to AIB's 2.1% five-year fixed green rate. (But getting a BER assessment only to find your rating is less than B3 means that you would have wasted the money on the assessment.)
 
Last edited:
Your break fee should be around €90 at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with KBC (and please post it here when you receive it). In your case, it is extra volatile because there is so long left on your fixed rate.
  • Switching immediately to KBC's 5-year fixed rate (2.4%) will save you about €2,490 over the next 4 years. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
    • Of course, if you decide to do this, you will probably want to switch again in 5 years when your fixed rate expires and your mortgage moves onto Bank of Ireland's books, at which point you will be subject to their (probably higher) interest rates. (For the savings estimate, I'm assuming that the variable rate stays around 3%.)
  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €5,180 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €3,380 over the next 4 years – but with the longer security of 7 years on a fixed rate
These savings estimates use for comparison the scenario of doing nothing. The estimates also account for fees and cashback.

Note: the Avant savings estimate assumes that you are not eligible for the €1,500 cashback. To be eligible, the switch to Avant has to be underway before the end of March and you must use a broker who is an Avant "Gold Partner". I don't know what "underway" means but if you are inclined to try to beat the deadline you could talk to an Avant Gold Partner as soon as possible and see if it is possible.

If you're prepared to settle for smaller savings in exchange for a longer fixed rate, consider Avant's 2.1% 10-year fixed rate (€2,650 net savings over 4 years) or their 2.25% 15-year fixed rate (€1,900 net savings over 4 years).
 
Last edited:
Fantastic thread.

I'm currently also paying €100 per month overpayment.

My fixed rate is up in 2028 and I'd probably be in a position to pay off 80% of the remaining mortgage at that stage.

However, I'd like to get onto a cheaper rate and speed up the paying off process.

Thanks!


  • Current lender: KBC
  • Outstanding mortgage balance (how much you still owe): €106k
  • Approximate value of your property: €300k
  • The date you started your fixed-rate mortgage (month and year): Aug 2018
  • How many years you fixed for: 10
  • Your current mortgage interest rate: 3.1%
  • Your current monthly repayment (excluding any overpayments): €560
  • Your property's BER (Building Energy Rating) – estimated if necessary: A3
  • 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 and when?: No
 
Hi Paul F,
Great thread. Here is my details:

  • Current lender: Ulster Bank
  • Outstanding mortgage balance (how much you still owe): €87,500
  • Approximate value of your property: €260,000
  • The date you started your fixed-rate mortgage (month and year): June 2018
  • How many years you fixed for: 7 years [until 30/09/2025] @ 3.29% fixed rate
  • Your current mortgage interest rate: 3.29%
  • Your current monthly repayment (excluding any overpayments): €617.45
  • I paid €6,000 lump sum recently. My new monthly payment from 14/03/2022 is €578.19
  • Your property's BER (Building Energy Rating) – estimated if necessary: C3
  • Are you due to get extra cashback from your current lender in the future, If so, how much and when? : No
  • Got my options letter from UB with break fees after ringing them:
  • 2 year fixed rate 2.20% until 30/06/2024 reverting to a variable rate 3.50%. Break fee is € 963.18. Monthly repayment is €532.21.
  • 4 year fixed rate 2.35% until 30/06/2026 reverting to a variable rate 3.50%. Break fee is €1028.85. Monthly repayment is €538.39
  • 5 year fixed rate 2.35% until 30/06/2027 reverting to a variable rate 3.50%. Break fee is €1028.85. Monthly repayment is €538.39.
  • 7 year fixed rate 2.80% until 30/06/2029 reverting to a variable rate 3.50%. Break fee is €1225.87. Monthly repayment is €557.17.
  • 10 year fixed rate 2.80% until 30/06/2032 reverting to a variable rate 3.50%. Break fee is €1225.87. Monthly repayment is €557.17.
  • Any thoughts would be appreciated. thanks Gerard
 
My estimate of your break fee is zero at the moment – but break fees are volatile because wholesale interest rates are volatile, so confirm it with Bank of Ireland closer to the time of any switch. Anyway, let's use the €397 break fee that Bank of Ireland quoted you.
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €9,740 over the next 5 years
  • Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will save you about €8,480 over the next 5 years – but with the longer security of 10 years on a fixed rate
  • Switching immediately to Avant Money's 15-year fixed rate (2.25% with no cashback) will save you about €6,440 over the next 5 years – but with the even longer security of 15 years on a fixed rate
These savings estimates use for comparison the scenario of immediately breaking out of your current Bank of Ireland fixed rate and re-fixing with them for 5 years at 3.0%. The estimates also account for fees.

The estimates also assume that you get your loan-to-value ratio (LTV) below 60% so that you are eligible for the listed rates. Your LTV is currently 235k/390k = 60.3%. A slightly higher property valuation (€392k) or a few more monthly mortgage payments or a small overpayment will get you below 60%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.

Can you confirm that you received the 1% extra cashback this month? Did you really mean March 2022, or did you mean March 2023?
 
Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with KBC (and please post it here when you receive it). In your case, it is extra volatile because there is so long left on your fixed rate.
  • Switching immediately to KBC's 5-year fixed rate (2.4% with no cashback) will save you about €2,750 over the next 4 years versus staying on your current rate – and is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed), and there are no fees, except possibly a valuation fee (€150)
Of course, if you decide to stay with KBC and switch to their 2.4% rate, you might want to switch again in 5 years when your fixed rate expires and your mortgage moves onto Bank of Ireland's books, at which point you will be subject to their (probably higher) interest rates. Unless you are then in a position to pay off a large part of your remaining balance, which would mean that higher interest rates wouldn't matter as much.
  • Switching immediately to Haven Mortgages Limited's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €4,860 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 €4,460 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €3,020 over the next 4 years
  • Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will save you about €2,440 over the next 4 years
These savings estimates use for comparison the scenario of doing nothing, and assume that your monthly repayment continues at €660, i.e., you continue the €100/month overpayment. The estimates also account for fees and cashback.

For any of the above products (rates), you may incur a break fee if you pay off a large part of the mortgage before the fixed term expires, so think about when you might be making this large payment and choose the product with the most-appropriate fixed term for your needs.

Note: the Avant savings estimates assume that you are not eligible for the €1,500 cashback. To be eligible, the switch to Avant has to be underway before the end of March and you must use a broker who is an Avant "Gold Partner". I don't know what "underway" means but if you are inclined to try to beat the deadline you could talk to an Avant Gold Partner as soon as possible and see if it is possible.
 
Last edited:
Thanks so much for this Paul.

I received the quote today of €2,438, dated 23 March. They sent me the cost of redeeming the whole mortgage rather than just the break fee so will give them a bell.

I did my own calculations on switching a few months ago and the cost was prohibitive so am happy to see it reduce so much. With interbank
interbank rates so volatile is it worth asking again for another calculation for just the break fee or is that a total gamble (could go either way?)

Thanks
 
Autumn54 said:
I received the quote today of €2,438, dated 23 March. They sent me the cost of redeeming the whole mortgage rather than just the break fee so will give them a bell.
Click to expand...
If they said the €2,438 was the "break funding cost" (or a similar phrase), that is the break fee.

It is difficult for me to accurately estimate break fees from KBC because they seem to be using slightly different reference rates to other lenders.

Given how much you could save even if the break fee increases a bit, I'd say just get on with the switch. But:
  • Clarify with the broker if you'll be liable for a fee if you pull out of the switch
  • Check the break fee again as the switch gets close to completion to make sure it hasn't increased dramatically
Alternatively, if you are confident that the switch will succeed (see here for the main reasons it might not) you could ask for an updated break fee this week and then break out of the KBC fixed rate and pay the break fee. And then move onto either their 3.0% variable rate (no risk of a future break fee) or their 2.25% 2-year fixed rate (which could have a possible future break fee). The latter will save you about €2,600 in interest over the next year versus your current rate.

This rate is a proxy for the wholesale rate that is affecting your break fee. (Note to other readers: a different rate applies in your case.) As that rate increases, your break fee decreases, and vice versa. Because the rate has increased in the last week, ask them for an updated break fee. (Wait until Wednesday of this week before asking, I would say.) If it is suitably low, consider breaking out of your current fixed rate to lock in the low break fee.
 
Last edited:
Thanks for this information. I plan to start the switch immediately to Avant 10 year fixed @ 2.1% will make a small overpayment to bring the LTV below 60% I Will update you on how it progresses.
 
Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with ICS Mortgages.

Edit: It is possible that your break fee will be higher than zero because ICS are a non-bank lender. I would be grateful if you could post your break fee quote here when you receive it.
  • Switching immediately to Haven Mortgages Limited's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €6,260 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (2.15% with no cashback) will save you about €2,760 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 (2.3% with no cashback) will save you about €1,300 over the next 4 years – but with the even longer security of 10 years on a fixed rate
These savings estimates use for comparison the scenario of switching to the 2.45% rate with the ICS when the current fixed rate ends. And that's assuming that ICS are even offering a 2.45% rate in three and a half years – it could be higher (or lower). The estimates also account for fees and cashback.

If you're feeling brave, you could consider the strategy outlined in this thread: switch to Haven's 2.35% 3-year fixed rate and get the €5k cashback. Then quickly switch to Haven's 2.0% green rate. If it works, you will be better off by about €9,260 in four years' time. Nobody knows for sure if Haven will allow you to do this, so you might be stuck on the 2.35% rate, but at least you'd have got the €5k cashback. You'll also have to convince them to lend you more than €250k to be eligible.

The estimates also assume that your loan-to-value ratio (LTV) really is below 80% so that you are eligible for the listed rates. Your LTV estimate is 250k/320k = 78.1%. If you get a valuation of less than €313k, you will need to make a few more monthly mortgage payments or a small overpayment to get the LTV below 80%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.
 
Last edited:
Thanks for this, Paul. Out of curiousity, what rates did you use to calculate the breakage fee?
 
You must log in or register to reply here.
Menu
Log in
Register