Brendan Burgess
Founder
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This borrower fixed for 10 years , three years ago. She is now selling her home and is now facing a break fee of €14,000 on a mortgage of €183k.
What are the lessons from this?
If you are absolutely sure that you are in your forever home, then it's ok to fix for a long term.
But if you might be trading up or moving in the medium term, how risky is it to fix for the long term?
The fixed rate break fees are based on the money market rates the lender can get. These are currently negative for long terms. But it would be expected that they would rise over time.
If they do rise, then there will be no break fee.
So maybe fixing for 10 years or 20 years today is low risk as the most likely outcome is that if you do want to break in a few years, there may be no break fee.
Brendan
Break fees with Kbc mortgage
Hi. I'm selling my property currently 3years into 22 year mortgage with a 10 Yr fixed rate of 3.2%. Kbc have quoted a 15k break fee. This seems very high. I was originally told it would be 10k 2 years previous. Is there anyway of appealing this or even reducing it esp kbc leaving the market. Any...
www.askaboutmoney.com
What are the lessons from this?
If you are absolutely sure that you are in your forever home, then it's ok to fix for a long term.
But if you might be trading up or moving in the medium term, how risky is it to fix for the long term?
The fixed rate break fees are based on the money market rates the lender can get. These are currently negative for long terms. But it would be expected that they would rise over time.
If they do rise, then there will be no break fee.
So maybe fixing for 10 years or 20 years today is low risk as the most likely outcome is that if you do want to break in a few years, there may be no break fee.
Brendan