Mortgage - low fee for breaking fixed rate

I am a PTSB customer and moving to AIB for 2000€ cashback. Getting a lower interest rate with AIB, saving of over 6000€ over the next 5 years.

It's in comparison between PTSB vs AIB.

Hi,

I see some people in this thread over the last couple of years, seem to have break costs/fees on fixed rate mortgages, charged at less than 100 euro.

My mortgage is with BOI and after calling today they informed me that my break cost would be over 1500 euro, for a 5 year fixed rate that expires next year.

What am I doing wrong?

It generally depends on the "interbank" interest rates (what a bank would have to pay to borrow from another bank) available at the time you fixed for that amount of years, how long you have left on the fixed rate, and what the interbank rates are now for the amount of years you have left. Plus the banks use slightly different formulae to calculate what they want to charge you. But the underlying principle is if they aren't losing any money, you don't get charged.

As the interbank rates can swing up and down, someone who fixed a week before or after you could get a wildly different break fee to you depending on what happened to the interbank rates. And as interbank rates continue to change, you might get a different answer in a week to what you might get today.

Let's say you fixed three years ago, for five years. You would find out what the interbank rates were on a five-year loan on that date, three years ago. Then you find out what the interbank rate is today on a *two*-year loan - i.e., the amount of time you have left. You then have to do other calculations as dictated by the bank's formula, BUT if the rate from the time you fixed is lower than the rate now - which it might well be! - then the result is a negative number and hence you don't get charged a break fee.

The best way to find out what it actually might be is to head to the forum at https://www.askaboutmoney.com/threads/mortgage-switching-in-ireland-when-which-and-how-and-calculations-of-break-fee-estimates.226638/ and the kind folks there will work it out for you. The interbank rates (or surrogates thereof) are available online and it is possible to work it all out yourself, but seeing as someone will do the heavy lifting for you... let them.

Bank of Ireland quoted me a few grand too, I've a few years left on a fixed rate mortgage.

Not the case. I have 2 years left on a 5year fixed at 3%

4 months ago the break fee was 1200 today it is 100 euros :-)

Just switched to kbc

Are Ulster Bank giving people a break on breakage seeing as they're winding up operations? I'll ring them this week but I want to know what to aim for if it's high. I've 3 years left on a 5 year.

We're with BOI, 5 year fixed at 3% since Jan 2019 and break fee quoted in Dec 2021 was e2.5k.

I did ask about switching to a different 'plan' with BOI, being the green 4 year fixed high value, but was told this was not allowable as it was only available to new customers.

We're due 3.2k in cashback in a couple of years, but based on the rates as of now and the way they might increase by the end of our fixed term, seriously considering paying the break fee, giving up the cashback and switching to Avant!

Not sure, 5 or 7 years anyway!

Signs of interest rate increases (Fed, BoE,maybe ECB) and maybe a lot of competition for kbc and ub customers right now so maybe rates are at there most competitive now for a long time to come!?!

Hard to say,but anything under 2% seems good from an Irish perspective and Im hoping that if I go 7, I shouldn't have any regrets in 5 years time that I've another 2 years on my term!