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

Thanks for all the information Paul. I actually have little to no interest in moving banks at the moment. We only did it last year and it was so much hassle but there were errors that had to be sorted so I guess it should be easier. We only have around 7 and half years remaining on the mortgage so I'd be hoping if we made the over payment of 25k that would knock almost 3 more years off it. So I don't think I'd fix again for 5 years but rather 3 years.

We made a 12k lump sum payment last year just before we fixed and it took on from 10 years to just over 8 and a half years.

In relation to the BER cert we don't have one. We built our home in 2011 and it wasn't a requirement back then so we would have to pay to get one done. Its also a detached bungalow in the countryside so there is nothing to go off from other neighbours. But I guess it is something we could consider. The savings would be minimal im guessing however due to the low balance of the mortgage but the money would be definitely better in my pocket than the banks. We just want to pay off our mortgage as quickly as possible now so every little helps and all that!!!
 
If you managed to get the green 2.1% rate, you would save somewhere between €300 and €500 in interest over the next 3 years (depending on when you make the overpayments). But's that's before the cost of a BER assessment, which could wipe out a chunk of those savings – and you might not even get the B3 rating you need. So on balance it might not be worth it.
 
thanks so much for this. I really appreciate the work you put into it and all the advice
 
First off, massive thanks for doing this. I'm thinking of switching to Avant, but my broker said that I've currently spent very little time [Nov'2019 start] with the current provider and so they might not accept it

  • Current lender = Finance Ireland [serviced by "Pepper"]
  • Outstanding mortgage balance (how much you still owe) = 166K
  • Approximate value of your property = 320K
  • The date you started your fixed-rate mortgage (month and year) = November, 2019
  • How many years you fixed for = 5
  • Your current mortgage interest rate = 2.8%
  • Your current monthly repayment (excluding any overpayments) = 825.70
  • 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 cashback
 
Great thread, thanks in advance.

  • Current lender: KBC
  • Outstanding mortgage balance (how much you still owe): €275k
  • Approximate value of your property: €600k
  • The date you started your fixed-rate mortgage (month and year): May 2019
  • How many years you fixed for: 5
  • Your current mortgage interest rate: 2.65%
  • Your current monthly repayment (excluding any overpayments): €1,163.67
  • 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, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much and when?: No
 
Thanks for providing this advice Paul. Last time I checked with BOI the cost of breaking they quoted me was enough to scare me off. It'd be great to get your estimate as things stand today.
  • Current lender: BOI
  • Outstanding mortgage balance (how much you still owe): €230k
  • Approximate value of your property: €400k
  • The date you started your fixed-rate mortgage (month and year): March 2018
  • How many years you fixed for: 10
  • Your current mortgage interest rate: 3.3%
  • Your current monthly repayment (excluding any overpayments): €1,370.13
  • 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, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much and when?: Yes, 1% after 5 years (€2,649)
 

Paul, thanks for your info.

I did follow up with BOI today and the break fee was indeed nil!

Out of curiousity, is it the interbank rates driving the reduction from 2.5k to nil in the space of a few months?
I plan to switch to Avant asap, but obviously don't want to risk the break fee somehow going back up towards 2.5k on the meantime!

I am thinking Avant as Haven seem to have potentially higher follow on rates which could be a risk after the 4/5 year term.
 
Huge thanks for providing this advice, it is very much appreciated.
Here are my details:

  • Current lender : Ulster Bank
  • Outstanding mortgage balance (how much you still owe): €204,500
  • Approximate value of your property: €470,000
  • The date you started your fixed-rate mortgage (month and year): July 2018
  • How many years you fixed for: Fixed rate finishes on 30/09/22
  • Your current mortgage interest rate: 2.6
  • Your current monthly repayment (excluding any overpayments): €1,403
  • 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, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much and when? : no

We asked the bank a week ago about a breakage fee and they said they would send us the details. We got a letter from them today with a breakage fee of €677.58. But there is no information provided as to how they came up with this figure.
Do you think it is correct? And if we waited a month or two, would the breakage fee go down?

Thanks!
 
Thanks very much for this. I've been considering switching for a while and completed an application for Avant yesterday to have an option.

My other potential easy option is the AIB Green fixed rate. My neighbor has switched a few times in the last few years for cashback offers but I never bothered with it. Only other complication is that I'm considering selling the house in the next 18-24 months to renovate another house that I wouldn't be purchasing.

Thanks again!

  • Current lender: AIB
  • Outstanding mortgage balance (how much you still owe): €242k
  • Approximate value of your property: €420k
  • The date you started your fixed-rate mortgage (month and year): Currently on a variable of 2.95%
  • How many years you fixed for: N/A
  • Your current mortgage interest rate: 2.95%
  • Your current monthly repayment (excluding any overpayments): €1103
  • Your property's BER (Building Energy Rating) – estimated if necessary: B3
  • Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much and when?: No
 
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Hi Paul,

Here’s my details. Thanks in advance.

I am thinking just to refix with KBC for 3 years at the same rate as below. Basically I don’t have the energy to switch to a new mortgage provider (and given the details below you wouldn’t blame me) but would be happy to hear any recommendations.

  • Current lender: KBC
  • Outstanding mortgage balance (how much you still owe): €144,700
  • Approximate value of your property: €350k
  • The date you started your fixed-rate mortgage (month and year): April 2021
  • How many years you fixed for: 2 years
  • Your current mortgage interest rate: 2.25%
  • Your current monthly repayment (excluding any overpayments): €628
  • Your property's BER (Building Energy Rating) – estimated if necessary: C1
  • Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much and when?: No
I contacted KBC back on March 4th and requested a breakage fee. A week later, I received a phone call from KBC and was informed the the breakage fee was zero. I requested for the letter to be sent out.
Since then I’ve called possibly 4-5 times enquiring where this letter was as I hadn’t received it. Speaking to staff each time, it was confirmed my breakage was zero. When I called KBC over the weekend, I was informed a new breakage letter was issued on the 25th (I hadn’t requested it and they were clueless on why it had been generated). Getting tired and frustrated that I still hadn’t received the breakage letter, I called today and was informed that I could collect the letter from my local KBC Hub (they’d email & print it there). So I collected the letter this evening and upon reviewing it this evening, I discovered that there is a breakage fee of €329. Absolutely couldn’t believe the shambles of KBC could keep getting worse but there you go.
Anyway I called them and even though I spoke to someone in the mortgage team, the agent couldn’t view the letter I had received and hadn’t visibility of what my breakage fee actually is. I am meant to be getting a phone call from them in the next 5 workings days but I wouldn’t hold my breath. This isn’t my first time getting shafted by KBC with its sub par customer service so unfortunately am accustomed to it.

Anyway rant over, if you would mind calculating my current breakage fee and if it’s possible that the time that has elapsed between the two breakage letters being issued, (14/03 1st letter & 25/03 2nd letter) that it could be really possible for the breakage to go from zero to €329.
 
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 KBC's 5-year fixed rate (2.4% with €3,000 cashback) will save you about €4,100 over the next 4 years
    • 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
  • Switching immediately to AIB's 5-year fixed rate (2.35% with €2,000 cashback) will save you about €3,260 over the next 4 years
  • Switching immediately to Ulster Bank's 5-year fixed rate (2.35% with no cashback) will save you about €2,700 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 Permanent TSB's books, at which point you will be subject to their (probably higher) interest rates
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €2,500 over the next 4 years – but you may not be eligible (see below)
  • Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will save you about €2,020 over the next 4 years – but you may not be eligible (see below)
These savings estimates use for comparison the scenario of switching to the 2.20% rate with Ulster Bank when the current fixed rate ends. And that's assuming that Ulster Bank are even offering a 2.2% rate in Oct 2025 – it could be higher (or lower) The estimates also account for fees and cashback.

Avant say that your minimum balance must be €100k to switch to them. But if their 7- or 10-year fixed rate appeal to you, talk to an Avant broker and see if there is any flexibility around this.

You are misunderstanding the letter you received from Ulster Bank (not surprisingly because it is very confusing). They are telling you the maximum possible future break fee if you were to switch to the specified rate and then break out of it. But your current break fee is probably zero.

Can you check if you received a second letter from Ulster Bank around the same time? If so, what is the break fee that they quoted (and what is the date on the letter)?
 
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kmchammer said:
Out of curiousity, is it the interbank rates driving the reduction from 2.5k to nil in the space of a few months?
Click to expand...
Yes – see the recent spike in the relevant swap rate (which serves as a proxy).

kmchammer said:
I plan to switch to Avant asap, but obviously don't want to risk the break fee somehow going back up towards 2.5k on the meantime!
Click to expand...
If you are confident that the switch will succeed (see here for the main reasons it might not) you could immediately break out of the BOI fixed rate to lock in the zero break fee and then move onto their 2.9% 1-year fixed rate. You might have to pay a break fee when you break out of that 2.9% rate, though (when you complete the switch to Avant). But since there will be less time left on the 2.9% fixed rate (less than 1 year versus 2 or 3 years on your current fixed rate), on average you would expect the break fee to be lower. But there are no guarantees in any of this, so it's your call.
 
Thanks Paul.

Is there any way to anticipate a fall in that relevant swap rate or is that like guessing the lotto numbers (is it variables of central banks, Ukraine, covid, inflation etc?)

I think we should meet the conditions for Avant but agree,can never be certain.
One thing I saw mentioned on the rates is to move to a variable rate, on the basis that it would crystallise the break fee of nil and then I believe there is no break fee on a variable rate?

I presume the variable rate will be higher,but if I could switch within 6-8 weeks, it should be minimal in the grand scheme. Obviously if we're ineligible for a switch we would be stuck in the variable a bit longer and need to re think!
 
kmchammer said:
Is there any way to anticipate a fall in that relevant swap rate or is that like guessing the lotto numbers (is it variables of central banks, Ukraine, covid, inflation etc?)
Click to expand...
Exactly – it's driven by macroeconomic factors.

There is indeed nothing stopping you moving onto BOI's variable rate to avoid a future break fee. But that rate is 3.9% Each month on that rate will cost you an extra €230 in interest (versus the 3.0% rate), and the switch will easily take two months, if not three.
 
Thanks Paul F for replying. Much appreciated. Yes i had a second letter. My break fee letter was €0 and the date was 16 March.
 
Your broker is almost certainly wrong (see this thread).

Your break fee should be zero at the moment – but it is volatile because wholesale interest rates are volatile, so confirm it with Finance Ireland. Note: it is possible that your break fee will be higher than zero because Finance Ireland 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's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €4,520 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €2,800 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Switching immediately to Finance Ireland's 5-year fixed rate (2.3% with no cashback) will save you about €1,900 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 10-year fixed rate (2.1% with no cashback) will save you about €1,840 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 2.25% rate with Finance Ireland when the current fixed rate ends. And that's assuming that Finance Ireland are even offering a 2.25% rate in Nov 2024 – it could be higher (or lower). The estimates also account for fees and cashback.

Note that the longer you fix for, the higher the break fee could potentially be in the future, which could be relevant if you want to move home. Of course, it's also possible for a future break fee to be small or zero. And at least some of Avant's fixed rates allow you to "take your mortgage with you" if you move home. It would be worth contacting them for clarification on the terms and conditions.
 
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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).
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €4,080 over the next 4 years
  • Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will save you about €2,500 over the next 4 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 €900 over the next 4 years – but with the even longer security of 15 years on a fixed rate
  • Switching immediately to KBC's 5-year fixed rate (2.4% with no cashback) will save you about €640 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
These savings estimates use for comparison the scenario of switching to the 2.25% rate with KBC when the current fixed rate ends. And that's assuming that KBC are even offering a 2.25% rate in May 2024 – it could be higher (or lower). The estimates also account for fees.

Note that the longer you fix for, the higher the break fee could potentially be in the future, which could be relevant if you want to move home. Of course, it's also possible for a future break fee to be small or zero. And at least some of Avant's fixed rates allow you to "take your mortgage with you" if you move home. It would be worth contacting them for clarification on the terms and conditions.
 
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My estimate of your break fee is around €200 at the moment – but it is volatile because wholesale interest rates are volatile. Note: when you requested your break fee you received two separate letters from Ulster Bank a few days apart. Look for the line that says: "To break out of this fixed rate early, you would have to pay a fee of €X". That amount is your break fee. Ignore all other references to break fees. Does that line say €677?

Anyway, let's use my estimate of €200. (I'm not saying that it's correct/accurate.)
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €1,500 over the next 4 years
  • Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will save you about €400 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • Switching immediately to Ulster Bank's 5-year fixed rate (2.35% with no cashback) will save you about €40 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 Permanent TSB's books, at which point you will be subject to their (probably higher) interest rates
These savings estimates use for comparison the scenario of switching to the 5-year 2.35% rate with Ulster Bank when the current fixed rate ends. And that's assuming that Ulster Bank are even offering a 2.35% rate in October of this year – it could be higher (or lower). The estimates also account for fees.

Note that the longer you fix for, the higher the break fee could potentially be in the future, which could be relevant if you want to move home. Of course, it's also possible for a future break fee to be small or zero. And at least some of Avant's fixed rates allow you to "take your mortgage with you" if you move home. It would be worth contacting them for clarification on the terms and conditions.

In the short term, break fees change when interbank interest rates change, and they are hard to predict. Your break fee is guaranteed to be zero by the end of September. And, all other things, i.e., interbank interest rates, being equal, it will be lower in three months than it is now. Therefore, it is probably best to just get on with the switch immediately if you're considering Avant, because it will take two to three months.

If your happy to re-fix with Ulster Bank (for much smaller savings), you could consider waiting a little while for the break fee to fall – but you run the risk of Ulster Bank putting up their mortgage rates in the meantime.
 
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Hi,


  • Current lender PTSB
  • Outstanding mortgage balance (how much you still owe) 390k
  • Approximate value of your property 600k
  • The date you started your fixed-rate mortgage (month and year) Oct 2019
  • How many years you fixed for: 5 year, end Oct 2024
  • Your current mortgage interest rate 2.8%
  • Your current monthly repayment (excluding any overpayments) €1551
  • Your property's BER (Building Energy Rating) – D something
  • Are you due to get extra cashback from your current lender: get about 36 a month as 2% cashback
 
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