Switching mortgage from Aib- trying to figure out of break fee correct

megmac

Registered User
Messages
2
HI all,

I am just about to switch from AIB to BOI- we are also getting a top up. We were fixed for 7 years at 3.5%. I.5 years through it now so 5.5 yrs remaining.
Current mortgage with AIB- 290,000. They are charging €4,678 to redeem mortgage.
Ive been reading the law on the EU Regulations- European Union (Consumer Mortgage Credit Agreements) Regulations 2016 which transposed the Mortgage Credit Directive into Irish law but don't have a clue to discern whether the fee quoted represents AIBs fair costs or a sanction imposed on me?

Calculation they say based on
A (amount being repaid early=290,000) x U(no. of months divided by twelve = 5.5) c D(difference between original fixed term rate and the applicable fixed rate for remaining term= can't figure this out as there's only options for 5 and 7 years)

Any help greatly appreciated. Have had major trouble getting to talk to anyone in the know in AIB. Due to change in next few days!

Thanks,
Meg
 
Ah, good old AIB break fees.

can't figure this out as there's only options for 5 and 7 years
Seemingly what they do is use both 5 years and 7 years, and give you the best of each calculation.
Looks like they're using 7 years, which is 3.15%.
balance * (3.5% - 3.15%) * 5.5
It's not exact, because they also factor in that your balance would reduce over the remaining term.

This works out far more favourably for you than using market rates (it'd be over 10k if they did).

Once you're moving to a rate <3.15%, you'll be saving more than the break fee. And that's before factoring in cashback.
 
Ah, good old AIB break fees.


Seemingly what they do is use both 5 years and 7 years, and give you the best of each calculation.
Looks like they're using 7 years, which is 3.15%.
balance * (3.5% - 3.15%) * 5.5
It's not exact, because they also factor in that your balance would reduce over the remaining term.

This works out far more favourably for you than using market rates (it'd be over 10k if they did).

Once you're moving to a rate <3.15%, you'll be saving more than the break fee. And that's before factoring in cashback.
Thanks a million for your help red onion. So you think it's actually not too bad? I totally bluffed and sent an email saying i thought it was against the law!
 
Yes, it looks correct. It's actually better than the legislation requires, because of how AIB wrote their terms.
 
Back
Top