Breaking out of an AIB fixed rate mortgage

Millem

Hi all,
Just wondering if anyone has negotiated their break out fee with AIB?
We were quoted (incorrectly) almost €8k after complaining and telling them I will move to EBS (who offer 2%) they sent out a letter apologising and said it is €5k.
I rang again and asked them for another calculation which I haven’t received yet. A mortgage broker has told me it should be around €3.5k.
I was in an AIB branch yesterday and told them I will 100% move to boi/ebs etc as the 2% is more than €8k. Ulster give €1.5k and have interest rates of 2.6% fixed for 4 years. Ideally I would like to just stay with AIB and go variable 2.95% for now. The lady said I should contact my local branch and see what they can do??
Thanks a million

judeboy101

The greatest con in modern Ireland is that switching anything is painless, from utilities to financial products, there is always a catch.

Millem

judeboy101 wrote: »

The greatest con in modern Ireland is that switching anything is painless, from utilities to financial products, there is always a catch.

It’s a saving of €200 a month plus €8k cash back.
I would prefer to stay with AIB and go variable.

davo10

Millem wrote: »

It’s a saving of €200 a month plus €8k cash back.
I would prefer to stay with AIB and go variable.

If you look at your mortgage contract, the equation for calculating the early exit penalty is on it. You can check the figures yourself by inputting amount/term/rate etc.

dar100

For some reason AIB charge more than others, great info on it over on ask about money website; in same boat myself

Millem

dar100 wrote: »

For some reason AIB charge more than others, great info on it over on ask about money website; in same boat myself

I know even though I read about the new EU directive on credit
Anyway my issue is getting a correct figure off them!!!

dar100

davo10 wrote: »

If you look at your mortgage contract, the equation for calculating the early exit penalty is on it. You can check the figures yourself by inputting amount/term/rate etc.

That's actually wring way of doing it,

The break out fee is suppose to be the difference between the price banks are charged to barrow money versus the difference at point of breakage, except for AIB FOR SOME REASON

davo10

dar100 wrote: »

That's actually wring way of doing it,

The break out fee is suppose to be the difference between the price banks are charged to barrow money versus the difference at point of breakage, except for AIB FOR SOME REASON

If it's in the mortgage contract, that's what the op agreed to and is the right way of doing it. It sets out exactly how the early exit fee is charged.

dar100

davo10 wrote: »

If it's in the mortgage contract, that's what the op agreed to and is the right way of doing it. It sets out exactly how the early exit fee is charged.

No it's not; there has been a new EU directive stating inter-bank lending as the criteria for breakage; this has been interpreted by everyone except AIB as difference in cost of borrowing at mortgage draw down; versus cost of inter bank borrowing at breakage; contract is superseded by EU credit directive; AIB need to be challenged on this; another tracker type rip off. Your advice is wrong Dave

van_beano

I switched from a 5 year fixed (3.5 years remaining) to an LTV mortgage last year with AIB, the breakage cost was around €360.

Why are some people getting charged thousands?

*Or have I completely misinterpreted this thread, 'tis Sunday morning after all

Sammy2012

For the record ebs are calculating their breakage fee the same way as aib. I'm stuck in a mortgage with them for another 2 years paying a rate of 4.85% and we have loan to value of less than 30%. I queried the fee at Christmas and it was 8800e.

dar100

EBS are offering the correct way of doing it, however they must be quoting your wrong when was this?

You were lucky with AIB there; everyone else is been charged

Sammy2012

I've been quoted twice since I read about the eu directive. The first time they quoted me 10k and the second time they quoted me 8800k. There was around 2 months in the difference of the 2 quotes. So guessing the interest payments of those 2 months brought it down. They told me they calculated the cost of borrowing the money in 2010 vs the cost of borrowing it now.

The funny thing about it was when I enquired in my branch she told me it would be around 1k to break the contract but then came back with 10k when she looked into it.

dar100

https://m.independent.ie/business/personal-finance/property-mortgages/mortgage-holders-locked-into-fixed-rates-now-able-to-switch-without-penalty-36396261.html

dar100

Sammy2012 wrote: »

I've been quoted twice since I read about the eu directive. The first time they quoted me 10k and the second time they quoted me 8800k. There was around 2 months in the difference of the 2 quotes. So guessing the interest payments of those 2 months brought it down. They told me they calculated the cost of borrowing the money in 2010 vs the cost of borrowing it now.

The funny thing about it was when I enquired in my branch she told me it would be around 1k to break the contract but then came back with 10k when she looked into it.

Ah 2010 may still of having high rates

Sammy2012

When I asked them about the directive they told me they knew nothing about it. This was in January.

Millem

van_beano wrote: »

I switched from a 5 year fixed (3.5 years remaining) to an LTV mortgage last year with AIB, the breakage cost was around €360.

Why are some people getting charged thousands?

*Or have I completely misinterpreted this thread, 'tis Sunday morning after all

We are on 3.8% fixed and want to move to 2.95% variable. We have just over 2 years left on it.

van_beano

Millem wrote: »

We are on 3.8% fixed and want to move to 2.95% variable. We have just over 2 years left on it.

That was the exact same situation I was in, 3.8% fixed for 5 years. Got it down to the >50%<80% LTV for 2.95%. Approx. €360 that cost me for breakage fees in March 2017. Obviously had to pay €150 for the valuers report though.

Millem

van_beano wrote: »

That was the exact same situation I was in, 3.8% fixed for 5 years. Got it down to the >50%<80% LTV for 2.95%. Approx. €360 that cost me for breakage fees in March 2017. Obviously had to pay €150 for the valuers report though.

Yes that’s exactly what we want to do! Gosh How did you manage it?

van_beano

Millem wrote: »

Yes that’s exactly what we want to do! Gosh How did you manage it?

I wrote about it on another thread at the time back in June 2017
https://www.boards.ie/vbulletin/showthread.php?p=103727551

From reading this thread it seems I got a bargain, was expecting it to be thousands to break the fixed rate at the time.

I remember ringing AIB on another subject and just mentioned about breaking the rate to the customer service agent at the time. I remember she just said that there was no harm in asking and she'd put the request through for me and I'll get a letter in the post. She was unable to tell me there and then what it would have been, it obviously gets sent further up the chain of command.

Went from the 3.9% to 3.3% and then with the further cuts at the end of last year it went to 2.95%.

I just don't understand how they can quote massive breakage fees now though.

davo10

dar100 wrote: »

AIB need to be challenged on this; another tracker type rip off. Your advice is wrong Dave

Op has a mortgage with AIB, my advice is right for AIB customers.

Millem

davo10 wrote: »

Op has a mortgage with AIB, my advice is right for AIB customers.

Davo surely an EU directive overrules AIB’s formula...a formula they don’t seem to know how to use themselves (in my case)!!!

davo10

Millem wrote: »

Davo surely an EU directive overrules AIB’s formula...a formula they don’t seem to know how to use themselves (in my case)!!!

Kinda like the VRT directive then?