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 Bank of Ireland (and please post it here when you receive it, including the date of the letter). In your case, the break fee is extra volatile because there is so long left on your fixed rate.
  • Switching immediately to Permanent TSB's 5-year fixed rate (2.55% with €10,800 initial cashback and 2% monthly cashback) will save you about €16,880 over the next 4 years
  • Switching immediately to AIB's 4-year fixed rate (2.2% with €2,000 cashback) will save you about €12,940 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (2.15% with no cashback) will save you about €11,920 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 €8,860 over the next 4 years – but with the even longer security of 10 years on a fixed rate
  • Switching immediately to Avant Money's 15-year fixed rate (2.5% with no cashback) will save you about €4,780 over the next 4 years – but with the even longer security of 15 years on a fixed rate
These savings estimates use for comparison the scenario of doing nothing (but see the next paragraph). You would get the Bank of Ireland €4,000 future cashback in such a scenario, and the savings estimates account for this. The estimates also account for fees and any cashback offered by the above lenders.

N.B. All of the above estimates (both the Bank of Ireland scenario and the other scenarios) assume that you are borrowing the extra €150k, and have increased your monthly repayments to keep your remaining mortgage term unchanged. You will need to check that the above lenders allow a €150k topup. (See this thread and consider posting your own question about the topup there.)

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 which mortgages this applies to and on the terms and conditions.

If you were borrowing €540k and you got a property valuation above €772k, you would be eligible for lower rates (0.1% lower) from Avant. That would make the Avant 7-year rate better than the AIB 4-year rate in terms of savings (but that all becomes irrelevant if Avant won't give you a €150k topup).
 
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Delay getting back here from the old thread but just want to thank you for your help here. UB confirmed that the breakage fee was indeed zero. Given our current situation swapping lenders wasn't going to be easy but we were able to refix with UB for 5 years at new rate of 2.20% (down from 2.85%). An extra €110 per month in our pockets.

Thanks again.
 
Hi Paul,

I received an "Early Redemption (Breakage) Charge" of 1233.88 from Ulster Bank dated 5th April (today). This was calculated based on the details below. Does this look right to you? Interestingly I also received the exact same figure on a redemption statement dated 21/03/22, though this may make sense as the number of payments taken then would be the same as now.

Thanks in advance,
GN
  • Current lender Ulster Bank
  • Outstanding mortgage balance (how much you still owe) 409,230.35
  • Approximate value of your property 825,000
  • The date you started your fixed-rate mortgage (month and year) May, 2018
  • How many years you fixed for 4 Years (fixed period ends 30/09/2022)
  • Your current mortgage interest rate 2.60%
  • Your current monthly repayment (excluding any overpayments) 1,8XX
  • Your property's BER (Building Energy Rating) – estimated if necessary A2
  • 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,
Can you check these figures out for me please. I would like a top up of €25k for home improvements also so not sure on sticking with UB and fixing again or switching?

Current lender: Ulster Bank
Outstanding mortgage balance: €165,275
Approximate value of your property: €350,00
The date you started your fixed-rate mortgage: 31st Dec 2020
How many years you fixed for: 2
Your current mortgage interest rate: 2.3%
Your current monthly repayment: €757.35
Your property's BER: A3
Are you due to get extra cashback from your current lender in the future: No
 
Hi @Paul F

So, in 2020 I posted this:

We’ve been in the house 6 years and fixed for 10 years at 2.95% about 2.5 years ago. Still owe roughly 252k and house is probably worth 500k ( but who knows really?). I knew there would be penalties for breaking the fixed term, but figured they would waive that if we wanted to take out a bigger loan with them.

I’ve been quoted.... €22,000

2 years later, we owe €240k, house worth maybe €560k, 5.8 years left on fixed rate at 2.95%
I wonder if the situation has improved?
thanks.

we didn’t move, or extend. (Sorry now with the increases in construction/everything).
 
  • Current lender: KBC
  • Outstanding mortgage balance (how much you still owe): 247K
  • Approximate value of your property: 450K
  • The date you started your fixed-rate mortgage (month and year) Nov 2020
  • How many years you fixed for: 2
  • Your current mortgage interest rate: 2.3% (includes current account discount)
  • Your current monthly repayment (excluding any overpayments): 1398
  • Your property's BER (Building Energy Rating) – estimated if necessary: C
  • 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 in advance
Also to add kbc have quoted zero break fee. I am awaiting the pack anyday in the post. At the moment I'm tempted to lock in for another 2 years and see what happens. I could get to below 60% LTV but would require a valuation. Sticking to 60%-80% is the least effort.
 
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Hi @Paul F,

Interested to hear your thoughts and thanks for your time on this.

Done some calcs myself and PTSB looks best (~13.5k saving over 5yrs assuming 2k fees for switch) but not sure what impact being a contractor (started last July with my wife a full time employee) would have on a switch
  • Current lender BOI
  • Outstanding mortgage balance (how much you still owe) €370,000
  • Approximate value of your property €650,000
  • The date you started your fixed-rate mortgage (month and year) May 2018
  • How many years you fixed for 10 years
  • Your current mortgage interest rate 3.3%
  • Your current monthly repayment (excluding any overpayments) €1750
  • Your property's BER (Building Energy Rating) – estimated if necessary - not sure - C at best - built in 1980
  • 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, due 1% (€4,000) in May 2023
Spoke to BOI this morning break fee is 0 currently, they offered me a 3% interest rate over 5 years - ~5k saving over 5 years plus 4k cashback so 9k. Interested to hear what other existing BOI customers have been offered.
 
My estimate of your break fee is very similar to Ulster Bank's quote.
  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €3,280 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €2,020 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 (2.1% with no cashback) will leave you worse off by about €320 over the next 4 years – but with the even longer security of 10 years on a fixed rate
  • Switching immediately to Ulster Bank's 5-year fixed rate (2.2% with no cashback) will leave you worse off by about €400 over the next 4 years. But 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 15-year fixed rate (2.25% with no cashback) will leave you worse off by about €2,680 over the next 4 years – but with the even longer security of 15 years on a fixed rate
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 (or Permanent TSB, if they have taken over your mortgage by then) are even offering a 2.20% rate in October 2022 – it could be higher (or lower). The estimates also account for fees and any cashback offered by the above lenders.

The above estimates assume that your current monthly repayment is €1,800 – you didn't specify it precisely.

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 which mortgages this applies to and on the terms and conditions.

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 €6,280 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.
 
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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 Ulster Bank (and please post it here when you receive it, including the date of the letter).

Note: you will receive two separate letters from Ulster Bank a few days apart, and their structure and wording can lead to confusion. Look for the line that says: "To break out of this fixed rate early, you would have to pay a fee of €X". That amount is your break fee. Ignore all other references to break fees.
  • Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €2,440 over the next 4 years
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €780 over the next 4 years – but with the longer security of 7 years on a fixed rate
  • Switching immediately to Ulster Bank's 4-year green fixed rate (2.25% with no cashback) will save you about €60 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 4 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 10-year fixed rate (2.1% with no cashback) will leave you worse off by about €320 over the next 4 years – but with the even 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 leave you worse off by about €1,420 over the next 4 years – but with the even longer security of 15 years on a fixed rate
These savings estimates use for comparison the scenario of switching to the 2.25% green rate with Ulster Bank when the current fixed rate ends. And that's assuming that Ulster Bank (or Permanent TSB, if they have taken over your mortgage by then) are even offering a 2.25% rate in January 2023 – it could be higher (or lower). Of course, you could just as easily do the internal Ulster Bank switch now instead of waiting. The estimates also account for fees and any cashback offered by the above lenders.

N.B. All of the above estimates (both the Ulster Bank scenario and the other scenarios) assume that you are borrowing the extra €25k, and have increased your monthly repayments to keep your remaining mortgage term unchanged. You will need to check that the above lenders allow a €25k topup. It is not clear to me when Ulster Bank will stop allowing topups. (See this thread and consider posting your own question about the topup there.)

It may seem like it is not worth switching to another lender but bear in mind that your mortgage will soon be owned by Permanent TSB, whose rates are much higher than Ulster Bank's. So if you don't switch now, you might find that you really want to switch in a few years' time, at which point rates might be higher.

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 which mortgages this applies to and on the terms and conditions.
 
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  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €1,320 over the next 4 years
  • Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will leave you worse off by about €40 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 leave you worse off by about €1,420 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 leave you worse off by about €1,460 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed – only a valuation).
    • 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 3-year 2.25% rate with KBC when the current fixed rate ends. And that's assuming that KBC (or Bank of Ireland, if they have taken over your mortgage by then) are even offering a 2.25% rate in November 2022 – it could be higher (or lower). Of course, you could just as easily do the internal KBC switch now instead of waiting. The estimates also account for fees and any cashback offered by the above lenders.

It may seem like it is not worth switching to Avant but bear in mind that your mortgage will soon be owned by Bank of Ireland, whose rates are much higher than KBC's. So if you don't switch now, you might find that you really want to switch in a few years' time, at which point rates might be higher.

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 which mortgages this applies to and on the terms and conditions.
 
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  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €18,360 over the next 5 years
  • Switching immediately to Permanent TSB's 5-year fixed rate (2.55% with €7,400 initial cashback and 2% monthly cashback) will save you about €16,820 over the next 5 years
  • Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will save you about €15,720 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 €13,100 over the next 5 years – but with the even longer security of 15 years on a fixed rate
  • Switching immediately to Bank of Ireland's 5-year fixed rate (3.0% and you would get the 1% (€4,000) cashback next year) will save you about €5,180 over the next 5 years. (Note: the savings are about €5k, not €9k, because you would be getting the future cashback even if you did nothing.) And 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 doing nothing. You would get the Bank of Ireland €4,000 future cashback in such a scenario, and the savings estimates account for this. The estimates also account for fees and any cashback offered by the above lenders.

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 which mortgages this applies to and on the terms and conditions.

I can't tell you whether or not another lender will let you switch to them given your employment situation. Consider posting a new thread with some more detail.
 
Paul F said:
Hi @Godders,

Could you provide your mortgage details in the format shown in the first post of this thread?

Thanks
Click to expand...
Ooops sorry

  • Current lender KBC
  • Outstanding mortgage balance (how much you still owe) €240k
  • Approximate value of your property €565k
  • The date you started your fixed-rate mortgage (month and year) February 2018
  • How many years you fixed for 10
  • Your current mortgage interest rate 2.95%
  • Your current monthly repayment (excluding any overpayments) €1,446
  • Your property's BER (Building Energy Rating) – estimated if necessary E2
  • 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 Paul
 
Your break fee should be around €400 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, including the date of the letter). In your case, the break fee is extra volatile because there is so long left on your fixed rate.
  • Switching immediately to Avant Money's 7-year fixed rate (1.95% with no cashback) will save you about €6,980 over the next 4 years
  • Switching immediately to Avant Money's 10-year fixed rate (2.1% with no cashback) will save you about €5,660 over the next 4 years – but with the longer security of 10 years on a fixed rate
  • Switching immediately to KBC's 5-year fixed rate (2.4% with no cashback) will save you about €4,340 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
  • Switching immediately to Avant Money's 15-year fixed rate (2.25% with no cashback) will save you about €4,320 over the next 4 years – but with the even longer security of 15 years on a fixed rate
These savings estimates use for comparison the scenario of doing nothing. The estimates also account for fees.

It may seem like it is not worth switching to another lender but bear in mind that your mortgage will soon be owned by Bank of Ireland, whose rates are much higher than KBC's. So if you don't switch now, you might find that you really want to switch in a few years' time, at which point rates might be higher.

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 which mortgages this applies to and on the terms and conditions.
 
Wow. That’s brillian. Thanks Paul. Big difference between €22,000 and €400! I won’t pretend to understand why… but I will chase it up with KBC and let you know how I got on.
 
Godders said:
Wow. That’s brillian. Thanks Paul. Big difference between €22,000 and €400! I won’t pretend to understand why… but I will chase it up with KBC and let you know how I got on.
Click to expand...
Please ask KBC to show their calculations (including "cost of funds" and "cost of breakage") when providing you with the break fee quote.
 
Thanks @Paul F

For my own understanding how do you land at the €18,360 figure for Avant 1.95% fixed, as I had this calculated as a saving of about 16.8k

Also will start a new thread on the switching question.

Thanks again really helpful.
 
Scoops said:
For my own understanding how do you land at the €18,360 figure for Avant 1.95% fixed, as I had this calculated as a saving of about 16.8k
Click to expand...
Here is a calculator for your current mortgage. If you add up the first five entries in the "Interest" column in the table, you get €57,288 – the amount of interest you will pay BOI over the next five years. Doing the same for a mortgage with Avant gives €33,425.

Your overall savings are (interest saved - BOI cashback - solicitor's fees - valuation fee - break fee)
≈ €((57288 - 33425) - 4000 - 1300 - 185 - 0) ≈ €18,380
 
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Thanks @Paul F
 
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