Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Mortgage - low fee for breaking fixed rate

1356728

Comments

  • Registered Users Posts: 19,549 ✭✭✭✭Cyrus


    Soarer wrote: »
    Cheers lawred2.

    So you could, in theory, swap every couple of months without penalty?

    Also, just for complete pig iron....
    January, I move from AIB to BOI, get cashback.
    July, I move from BOI to EBS, get cashback.
    January, I move from EBS to KBC, get cashback.
    July, I move BACK to AIB from KBC....get cashback?

    banks have started to tell people that they will only accept them if they have been with their previous lender for 12 months, so you need to be creative to avoid that, see a few threads on askaboutmoney :pac:


  • Registered Users Posts: 113 ✭✭nok2008


    The BOI 2% initial cashback is given to you on drawdown plus 45 working days. But the mortgage person in bank told me that you can then change bank without penalty.
    You must also ensure that your cashback is greater than your solicitor fees in order to make financial sense and the interest rates. I think that there may be some LTV ratios caveats on the cashback i.e. you might not be entitled to cashback if LTV <50%. Not 100% sure on this though and all banks will have different small print.


  • Registered Users Posts: 3,205 ✭✭✭cruizer101


    I wonder would it be possible to get a good rate from a solicitor to do this multiple times.
    I dont know the ins and outs of what is involved in the conveyancing but would think might be bit less work in doing the same property to same owners.


  • Registered Users Posts: 1,667 ✭✭✭Klonker


    Little bit off topic I guess but a related issue. How's the penalty calculated if I was for example to pay a lump of 50k off my mortgage? I presume it would have to be cheaper than breaking out of contract completely.


  • Registered Users Posts: 19,549 ✭✭✭✭Cyrus


    Klonker wrote: »
    Little bit off topic I guess but a related issue. How's the penalty calculated if I was for example to pay a lump of 50k off my mortgage? I presume it would have to be cheaper than breaking out of contract completely.

    It’s proportional


  • Advertisement
  • Registered Users Posts: 5,127 ✭✭✭James Bond Junior


    Just had a skim through and said I'd give my two cents. I was with KBC at 3.9% and moved 9 months after I drew down to Ulster Bank at 3.1%. They paid me €2k so it covered fees and a revaluation but I decided to keep repayments the same which shaved a whole 2 years off my term. UB allow you to move your LTV to a lower amount without penalty so I was able to move it down to well below 3% saving me more again. I will probably fix soon enough but it makes sense to check things out every 6 months rate wise but also keep an eye on the property price register to see how other property prices may effect your own LTV.


  • Registered Users Posts: 370 ✭✭kodak


    sternn wrote: »
    Definitely contact the bank. Most people don't bother ever getting their house revalued for mortgage purposes. Banks generally offer better interest rates as the LTV gets lower.

    Moved LTV with aib, went from 3.15 to 2.75 % , more than 80 to less than 50% LTV. Cost 150 and about 1 hour in total. Ill have the cost of the valuation back in a few months and I think it worked out at saving 10k over the mortgage. Very simple to do too. Would definitely recommend.


  • Registered Users Posts: 7,729 ✭✭✭Millem


    Aib have quoted me thousands to break :(


  • Closed Accounts Posts: 7,070 ✭✭✭Franz Von Peppercorn


    nok2008 wrote: »
    The BOI 2% initial cashback is given to you on drawdown plus 45 working days. But the mortgage person in bank told me that you can then change bank without penalty.
    You must also ensure that your cashback is greater than your solicitor fees in order to make financial sense and the interest rates. I think that there may be some LTV ratios caveats on the cashback i.e. you might not be entitled to cashback if LTV <50%. Not 100% sure on this though and all banks will have different small print.

    There is a penalty though - the 1% you lose out on after 5 years. Most people are not calculating that.


  • Registered Users Posts: 19,549 ✭✭✭✭Cyrus


    There is a penalty though - the 1% you lose out on after 5 years. Most people are not calculating that.

    It's not a penalty if you are saving money by moving


  • Advertisement
  • Registered Users Posts: 1,591 ✭✭✭LizardKing


    Howdy .. So I have BOI fixed rate for 3 years. I have about 6 months left on this rate. When it finishes I go automatically onto BOI variable rate ..if I stay on that I get 1% cashback after year 5 (this will not be worth it in my opinion)

    Sounds like I can just change now to a new fixed rate for 2 years on 2.9% ? So less monthly payments

    Can you not just do it online via this form ?

    https://form.bankofireland.com/personal-banking/borrow/mortgages/mortgage-rate-change/


  • Closed Accounts Posts: 7,070 ✭✭✭Franz Von Peppercorn


    LizardKing wrote: »
    Howdy .. So I have BOI fixed rate for 3 years. I have about 6 months left on this rate. When it finishes I go automatically onto BOI variable rate ..if I stay on that I get 1% cashback after year 5 (this will not be worth it in my opinion)

    Sounds like I can just change now to a new fixed rate for 2 years on 2.9% ? So less monthly payments

    Can you not just do it online via this form ?

    https://form.bankofireland.com/personal-banking/borrow/mortgages/mortgage-rate-change/

    you get the cash back by staying with BOI. I don’t think you have to be on the variable.


  • Closed Accounts Posts: 4,121 ✭✭✭amcalester


    LizardKing wrote: »
    Howdy .. So I have BOI fixed rate for 3 years. I have about 6 months left on this rate. When it finishes I go automatically onto BOI variable rate ..if I stay on that I get 1% cashback after year 5 (this will not be worth it in my opinion)

    Sounds like I can just change now to a new fixed rate for 2 years on 2.9% ? So less monthly payments

    Can you not just do it online via this form ?

    https://form.bankofireland.com/personal-banking/borrow/mortgages/mortgage-rate-change/

    Double check this but I don't think there was anything in the BOI T&C's that you had to stay on the variable rate to get the extra 1% cashback, just that you still hold a BOI mortgage and current account.


  • Registered Users Posts: 1,667 ✭✭✭Klonker


    LizardKing wrote:
    Howdy .. So I have BOI fixed rate for 3 years. I have about 6 months left on this rate. When it finishes I go automatically onto BOI variable rate ..if I stay on that I get 1% cashback after year 5 (this will not be worth it in my opinion)


    As far as I'm aware you'll get the 1% cash back after 5 years if you are still with BOI, I don't think it matters what type or term contract you are on in that time.


  • Banned (with Prison Access) Posts: 21 vincedh


    The banks use different methods for calculation of break fees. With base interest rates not moving for the past few years, break fees are miniscule in most cases except for AIB who take a different view on the calculation.
    On the cashback deals. Some solicitors were doing deals for a multiple switch as the extra work involved was not extensive. However the banks have now caught onto the loophole and are now insisting on the mortgage being with the previous lender for a minimum of 12-24 months.
    But do be ware of cashback deals. Banks are not charities and cashback deals usually cost the more in the long run especially if the bank has horrendous standard variable rates like ptsb or do not permit current customer avail of all fixed rate options (again ptsb are the worst in this regard).
    But certainly if you have a fixed rate, check and see if one of the current fixed rate deals is better for you. The break fee in most cases is miniscule or zero.


  • Registered Users Posts: 1,591 ✭✭✭LizardKing


    just went through the online link to give this a go. Will let people know if it works out

    Thanks OP


  • Registered Users Posts: 13,587 ✭✭✭✭mrcheez


    LizardKing wrote: »
    just went through the online link to give this a go. Will let people know if it works out

    Thanks OP

    I'm guessing it's this link? https://form.bankofireland.com/personal-banking/borrow/mortgages/mortgage-rate-change/

    what does that form do when you submit it?

    Just for them to review your details and get back to you with options?



    EDIT: ah I found the parent page that explains it: https://personalbanking.bankofireland.com/borrow/mortgages/articles/existing-customer-want-to-change-the-interest-rate-on-your-mortgage/


    cool, I'll give it a shot


  • Registered Users Posts: 5,175 ✭✭✭angeldelight


    When you want to switch mortgage I presume it’s a whole new application as in they’ll be looking at your employment etc again?


  • Registered Users Posts: 1,584 ✭✭✭Del007


    When you want to switch mortgage I presume it’s a whole new application as in they’ll be looking at your employment etc again?

    Salary cert, home insurance cert, home valuation, can't remember what else they looked for


  • Registered Users Posts: 135 ✭✭J@yK@y


    Hi
    I am on a discounted variable with UB (3.1%). I see I can take out 4 yr fixed at 2.6% also from UB which would be a saving. However, my question is what happens at the end of Year 4 ?

    I suspect I go onto the standard variable at that time (currently 4.3%) and need to contact them to take any of the other variable or fixed offers at that time?
    I presume I don't have the option to return to the var 3.1% unless it is still offered?

    thanks


  • Advertisement
  • Banned (with Prison Access) Posts: 21 vincedh


    J@yK@y wrote: »
    Hi
    I am on a discounted variable with UB (3.1%). I see I can take out 4 yr fixed at 2.6% also from UB which would be a saving. However, my question is what happens at the end of Year 4 ?

    I suspect I go onto the standard variable at that time (currently 4.3%) and need to contact them to take any of the other variable or fixed offers at that time?
    I presume I don't have the option to return to the var 3.1% unless it is still offered?

    thanks
    you'd automatically go onto the standard variable rate, but Ulster will also let you choose to go onto any other rate they offer at the time. So you could choose a further fixed rate at the rates they offer then. Ulster, like AIB will allow all customers access all rates offered


  • Registered Users Posts: 45,176 ✭✭✭✭Bobeagleburger


    vincedh wrote: »
    you'd automatically go onto the standard variable rate, but Ulster will also let you choose to go onto any other rate they offer at the time. So you could choose a further fixed rate at the rates they offer then. Ulster, like AIB will allow all customers access all rates offered

    Or switch again :)


  • Registered Users Posts: 1,591 ✭✭✭LizardKing


    LizardKing wrote: »
    just went through the online link to give this a go. Will let people know if it works out

    Thanks OP


    So have heard nothing back from BOI as yet . No email, sms .. nowt.


    I know they are really understaffed so am expecting a slow turn around :rolleyes:


    They make it sound sooo easy though!!!

    BOI wrote:

    You can do this all online, there’s no need to call or visit a branch:

    • Select the “Request a new rate” button below
    • Complete the online form
    • We will then email and text each person named on the mortgage
    • Open the email and use the 6 digit code within the text to access your request securely
    • Follow the online instructions to request your new rate…. and that’s it!


  • Registered Users Posts: 51,059 ✭✭✭✭bazz26


    Or just ring them.


  • Registered Users Posts: 1,591 ✭✭✭LizardKing


    bazz26 wrote: »
    Or just ring them.


    I'll just wait thanks .. if I hear nowt I'll ring after a week or so... wanna see how/if the service online works..



    I'm sure others are interested too :)


  • Registered Users Posts: 474 ✭✭The Megaphone


    bazz26 wrote: »
    Or just ring them.


    Great advice - definitely call them!


    I phoned earlier today and it was the easiest 3 minute conversation ever - gave my details, the Rep gave a quick overview of the available rates and possible savings (€60/month) so now they are sending out the paperwork for me and the wife to sign and return!


    Also was quoted a €0 break/funding fee - my own situation is that I have two separate mortgages with BOI for the purchase and refurbishment of the same property, and both were fixed for 3 years @ 3.1% with 7 months to run (before then returning to a variable rate for the rest of my life :().


    So big thanks to sternn for this one!


  • Registered Users Posts: 1,591 ✭✭✭LizardKing


    Got the letter this morning as I was running out the door.

    Only had a quick check

    It didn't quote a break fee and had some initial blurb about possible charges for breaking fixed rate and refer to section D ( section D had some formula they use for calculating the fee but no actual fee (that I could see)

    It had a number of rate options listed including the 2 year 2.9% and also a 3 year 3.0%

    I may be better off waiting to change when my fixed rate ends.

    Even thought they suggest "You can do this all online, there’s no need to call or visit a branch:"

    I'm thinking this may require a PHONE call after all as suggested by others in order to get the calculated break fee figure from them.


  • Registered Users Posts: 13,587 ✭✭✭✭mrcheez


    I chatted to them as well, I'd only save approx €15 / month going to 2.9% 2 Year and my breaking fee is €81 so not THAT much of a saving

    ...BUT...

    she said that you can pay in a lump sum off the capital without penalty when changing the rate. Normally you'd have to wait until the fixed term had ended, so that's handy for anyone in a position to pay in a chunk of cash.

    The savings for this are huge.


  • Registered Users Posts: 1,667 ✭✭✭Klonker


    mrcheez wrote:
    she said that you can pay in a lump sum off the capital without penalty when changing the rate. Normally you'd have to wait until the fixed term had ended, so that's handy for anyone in a position to pay in a chunk of cash.

    You can pay off lump sum without ending your contract and it's done at a proportionate level. For example, if your outstanding mortgage is €200k and they give you a quote of €1,000 to break the fixed term, if for example you didn't fully break and decided to just pay off €50k lump some it would only cost €250. Might be a better option if your main motivation is to make a lump sum payment and if the difference in the interest rates isn't much.


  • Advertisement
  • Registered Users Posts: 13,587 ✭✭✭✭mrcheez


    Klonker wrote: »
    You can pay off lump sum without ending your contract and it's done at a proportionate level. For example, if your outstanding mortgage is €200k and they give you a quote of €1,000 to break the fixed term, if for example you didn't fully break and decided to just pay off €50k lump some it would only cost €250. Might be a better option if your main motivation is to make a lump sum payment and if the difference in the interest rates isn't much.

    Well it's probably better to drop down to 2.9% from 3.1% anyway if I'm going to have to pay a breaking fee to pay in a lump sum.

    I'm not allowed to pay in a lump sum on a fixed term without breaking it.


Advertisement