Mortgage - low fee for breaking fixed rate

Danzy

https://www.boards.ie/discussion/comment/119236085#Comment_119236085

Rates are lower now than any time in centuries.

They won't be coming down.

Trimm Trabb

@Danzy Would you be saying to take 25 or 30 year fixed rates to people starting out?

bazz26

Who is offering 25 or 30 year fixed rates? I cannot see it making any financial sense offering rates of that length to the lender or the borrower.

odyssey06

https://www.boards.ie/discussion/comment/119283659#Comment_119283659

Avant for one. Suggest you check out their rates. Not sure why you think it does make sense.

Such long term offerings are common in other EU countries.

Avant are inundated with switchers.

bazz26

https://www.boards.ie/discussion/comment/119283726#Comment_119283726

I did but where are you seeing 25 or 30 year fixed rates from Avant?

I see upto 10 years which seems to be the norm on offer here:

https://www.avantmoney.ie/mortgages/fixed-term-rates

macvin

https://www.boards.ie/discussion/comment/119284251#Comment_119284251

Avant offer a "one mortgage" product where you can fix for the term of the mortgage. 15-30 years

https://www.avantmoney.ie/mortgages/one-mortgage

It is not a fixed rate for 15 years and then a different rate - if you choose 15 years, its a 15 year term and the rate is fixed for the entire term of the mortgage. You can over pay and also if you move and you stay with avant, there is no break fee.

If it the best value out there for new and existing mortgages

You also have Finance Ireland https://www.financeireland.ie/products/residential-mortgages/long-term-fixed-rates/ Up to 25 year fixed. A little more expensive, but they allow you move and keep the rate on the balance at that time. So 400k at 3.2% and in 10 years you want to move, and your balance is 300k - your new mortgage is 300k at 3.2% for the remaining 15 years and then a separate mortgage if you require more finance.

macvin

https://www.boards.ie/discussion/comment/119283659#Comment_119283659

It makes perfect sense.

Markets are awash with money. Pension funds need a diverse mix so are willing to take a small margin on a near guaranteed positive return with virtually no risk.

Avant are part of bank inter in Spain and also have huge long term deposits on their books.

For the borrower its make perfect sense especially as avant have added some positive terms and conditions - you can pay up to 10% extra off every year without penalty and you also won't have a break fee if you move house and take a new mortgage out with them. With rates unlikely to be this low and most likely going to average 2% in the medium term (ECB has stated this) it gives you certainty. Each 100k will cost €418 per month over 30 years, so a 400k mortgage is €1670/month and it will never increase no matter where interest rates go.

Taking the 400k - over 30 years at 2.95% (90%ltv) this costs €203k in interest.

Same 400k and taking expected interest rate increases and using an average bank rate of 4.5%, that same 400k would cost €330k in interest over 30 years. That's €127,000 extra and many people will say that average mortgage rates over the next 20-30 years will be 4%-5%.

Cape Clear

https://www.boards.ie/discussion/comment/119284342#Comment_119284342

Always useful to look at the total repayment over the lifetime of the mortgage.

Is the 10% over payment based on remaining balance?

timetogo1

Is on their page. You can over pay the mortgage by 10% of the balance each year.

https://www.avantmoney.ie/mortgages/one-mortgage

They have a nice product. I gave up on the application process though. I don't know if it was the brokers fault or Avants but it was way more complicated than getting my mortgage 14 years ago or when I switched to UB 6 years ago.

So I fixed as low as possible for as long as possible with my current lender (UB) which took one phone call and a couple of signatures.

Sunrise_Sunset

https://www.boards.ie/discussion/comment/119279897#Comment_119279897

I switched to a fixed rate. Hard decision, I felt very conflicted. Just have to be ok with the decision now even if rates do come back down.

Danzy

https://www.boards.ie/discussion/comment/119290702#Comment_119290702

I would genuinely stake my life on it that we'll see 10 .25 rises before we'll see one drop.

If we see a rate drop in the next 5 years it is only because the Eurozone economy is in such a crisis that it is fighting for survival.

Even if we had 10 rises interest rates would be negative in real terms and near multi century lows.

If you can fix for 10 , 20, 30 years do so. Work out your sums carefully, every scenario.

I've fixed for 10, hope to have it done by then.

Sunrise_Sunset

https://www.boards.ie/discussion/comment/119290791#Comment_119290791

I was torn about what to do. It felt "wrong" to hand back my tracker, but my rate wasn't that good anyway at 2.1% and would've increased in the coming months.

I fixed for 5 years. Will hopefully try to switch in 6 months once I'm through my probation period in my new job. Will hope to be quoted a zero break fee and try to switch to a lower fixed rate for 7-10 years with another lender. Right now I'm tied to PTSB due to changing employer. I also aim to have mine cleared in 10 years, all going well.

Danzy

https://www.boards.ie/discussion/comment/119290904#Comment_119290904

The tracker was a beaut for the time you had it. It would be the opposite in the future.

You have a plan and it makes sense, that's the biggest thing.

macvin

https://www.boards.ie/discussion/comment/119290904#Comment_119290904

Your tracker was more expensive than Avant's standard variable rate.

It literally was of no real value and you can be near certain it would have gone to 2.85% by end of September.

Your original tracker rate was good, but once you moved and changed it to 2.1% it became just OK. Then Avant come along and shake the market.

Today's low long term fixed rates of under 3% are the modern day trackers in terms of value.

As Danzy also says, rates will not be dropping to zero ever again unless we have a catastrophic recession. And that's highly unlikely.

Robert2014

I think we are finally over the line with the switch from KBC to Avant Money. We started the process at the start of the year and the waiting, etc. has been painful. We were on a fixed rate with KBC and they were charging us €1000 at the start of the year to break out of it but when time came to redeem the mortgage, there was no break fee. Hope this information helps someone and good luck with it!

ACAandCTA

https://www.boards.ie/discussion/comment/119291935#Comment_119291935

We're similar, started the Avant switch from BOI in March, just signed everything with our solicitor yesterday and she sent it off to Avant... Hopefully no issues as we've been guaranteed that if all in order by this Friday, we will meet the drawdown deadline of Friday week for the pre hike rates.

I spoke to BOI last week and our break fee is now nil, compared to 2.5k in december, hopefully most people are seeing this when they switch!

We've fixed for 7 years with Avant, would agree that it is unlikely that rates will get any better than where we are at right now, but in a few years time maybe there will be less of a requirement for Irish banks to hold capital and more competition in the market that will temper rate increases and keep them around current levels.... Maybe

Amzie

https://www.boards.ie/discussion/comment/119230177#Comment_119230177

.....

Trimm Trabb

Finally made the switch from 2.9% fixed with EBS to 2.1 fixed with AIB for 5 years.

€2000 cash back for switching and used ezfees to find solicitor which worked out at about €1300 so little profit there.

Did the whole thing online and have to say I found it painfully slow having started application in January and only gotten it over the line now and we were pretty prompt at our end. Im very happy to be in a fixed at the lower rate but will need the 5 years to psyche myself up to go through the process again!

Tileman

Yea did the aib one earlier this year. Took 6 months from sept to March for simple switch. Could not believe the delays and repeating requests for same information.

Cape Clear

https://www.boards.ie/discussion/comment/119303360#Comment_119303360

Did you need a valuation report and a BER cert?

Trimm Trabb

https://www.boards.ie/discussion/comment/119303484#Comment_119303484

Yes we did need both of those. House is a relatively new build so had the BER and paid had to get house valued through AIB which cost something like €150/€200.

ccarr

Reading comments I presume it's to late now to try and switch.

With finance Ireland currently 1 year done into 3 year fixed with at 2.65%, contacted them about extending it with them but new rates will be 3.8%

Is there anyway we could switch to other bank before interest rates going up

Del007

https://www.boards.ie/discussion/comment/119305716#Comment_119305716

Call them every week and see what the breakage fee is.

Kbc told me that there is a breakage fee to leave them, I asked them much it was. They got back to me with a quote of 0 euro

knipper

Just swapped rate with KBC. Was on 3 yr fixed. No charge to break and fix for 10yrs. Took two weeks for them to calculate the break fee and post it out , was zero. Then fixed via email that day. Very quick. 2.85% for 10yrs with KBC current account, no valuation required didn't have time to chase the avant rates. Pretty straightforward.

WLad

Hi all, wondering if anyone can help.

Currently 4 years into a 5 year 3% fixed with BOI and due about 3k next year in cash back. I requested a quote of new rates on their online tool but only the 2 year fixed was below 3% at 2.9%, the 10 was 3.3% I think.

1. Will I lose the cashback next year if I swap?
2. Does fixing at 3.3 for 10 years really make sense? I can't figure out what to do at all.

Any advice no matter how speculative would help, thanks.

crazyhorse

In a similar situation as yourself, 4 years into a 5 year fixed mortgage with BOI @3%. I have just refixed for 10 years at 3.3%. Not the best rate available by any means but it made sense in my case. I was also eager to get it sorted before expected rate rise next week. I was assured that cashback will still be paid next year when the 5 years is up.

ACAandCTA

https://www.boards.ie/discussion/comment/119306588#Comment_119306588

I was on the 5 year fixed at 3%, due about 3.2k cash back in 1.5 years time.

By moving to Avant and getting the 1.95% (or maybe 2.25% depending) rate for 7 years fixed, I'll be saving about 200e pm, so with cashback and solicitor fees,I'll be net zero after two years and then 5 years of savings; 200e pm for 5 years is about 12k, so you can really save money if you get a good rate! The saving will be more if the alternative is a 3.3% rate.

If you can get a better fixed rate now with a different bank then I'd go for that, once the long term savings will more than cover your cashback and solicitor fees.

Don't get lured in by the cashback,it's great to get the 2% up front and have been happy with that,but with rates only going up at the moment, fixing now at a really good rate could more than cover your cashback

Mortgagehelp

Hi. I'm just wondering does anyone know much about breaking fees? I know it can depend on various factors but I am early into a 2 year fixed term with BOI. I'm worried about the upcoming increase in interest rates and would like to move to a longer fixed term contract. I'd be interest in switching to Avant money like many others but can anyone estimate what type of breaking fee I'd be looking at? It's within the first few months of the mortgage term. Thanks.

Bobeagleburger

https://www.boards.ie/discussion/comment/119316452#Comment_119316452

This thread over at Askaboutmoney is brilliant. Fill out a few simple questions and one of the guys over there will be able to tell you your breakage fee (if any), and also your options.

https://www.askaboutmoney.com/threads/mortgage-switching-in-ireland-%E2%80%93-break-fee-calculations-and-savings-estimates.226638/

bazz26

I'm afraid nobody on here can answer that, only BOI can. You need to ring them but be aware that the breakage fee can change daily as it's calculated based off interbank rates. So it could be zero if you ask BOI tomorrow but if you ask a week or month from now it may not be.