Mortgage - low fee for breaking fixed rate

Millem wrote: »

They use the old way. I got my breakage fee yesterday.

ah ok i was misunderstood

cant believe they are still doing this.

Does the length you're into an fixed term impact the breakage fee?

18 months into 5 year fixed here.

Ha, that's exactly what I mean! I asked previously and was quoted over 10k.

Does really seem like there are inconsistencies in what the fee can be.

chases0102 wrote: »

Ha, that's exactly what I mean! I asked previously and was quoted over 10k.

Does really seem like there are inconsistencies in what the fee can be.

Not so much inconsistencies, as variables.

For example, with Ulster Bank, some of those variables would be how much it would cost the bank to lend you how much you owe today, for the amount of time you have left on your fixed part of the mortgage. So depending on the market the difference between the interest rates back when you fixed and today can be positive or negative. If negative then the break fee, for UB, is zero. This is gleaned from the very helpful folk in the Switcher Forum on Askaboutmoney.

Half way through a 5 year fixed rate of 3.4% with UB, they've quoted me
1666 breakage fee to change to a 2.3% 2 year fixed
1883 breakage fee to change to a 2.6% 4 year or 5 year fixed

Sync wrote: »

I really don't know how the breakage fee works. I was only 9 months into my 5 year fixed with AIB - and to switch to the 5 year green had €0 breakage costs.

AIB told us they will waive it if we stay with them!

Sorry, that's the breakage fee if I leave the new rate early. So the breakage fee for my current one is 1927.88, approximately the saving I would make if I switched, and they won't waive the breakage fee if I stay with them.

Salary Negotiator wrote: »

Where could one track this rate? Is it released publicly?

Usually its on the business rate pages.

Google Bank Cost of Funds rate and the bank name.

It differs from bank to bank. Ulster bank is currently 0.37:, bank of Ireland is 0.43%

It can change daily.



Aib do use the new method, but with a big drop in cost of funds, break fees have jumped.

Previously, banks were simply taking a bigger margin and as they reduced fixed rates, the margin fell as cost of funds did not change much, therefore the break fee was low.

But with cost of funds dropping by over 0.5%, break fees for most fixed rates have jumped

levi wrote: »

I’m a bit confused about the cost of breaking our fixed rate mortgage in order to switch to a better rate. We’d like to change from a 4 yr fixed term with Ulster Bank which we’re halfway through to UBs 5 year fixed.
<snip>

So my question is, is the letter we received from UB just outlining the 6 months interest as a break cost very misleading?

I'm doing exactly the same, but am only six months into the 4-year fixed...

As Q&A says, Letter 1 (which you have got) is useful as it states the max you would have to pay on one of those new rates if you decide to break again in the future, say if the rates come down again or you want to move to a different bank. This seems to be confusing a lot of people, but TBH it's only of interest if you want to switch again in the future.
The more important bit in the letter is the future repayments on those variety of different products, one of which you will now presumably switch to. BUT you have no idea how much the current break fee is, as you are missing Letter 2 which states it - I haven't got this either, asked for the cost to break last Monday and got Letter 1 today.

HOWEVER, as Letter 2 has been generated, UB can now tell you over the phone what the break fee is. They couldn't before if you requested the figure by phone as they hadn't crunched the numbers. So if it is worth your while - and look at the Askaboutmoney thread, it's NOT just about how much your repayments are reduced, it's also about how much extra you will have paid off the capital - you can then decide whether to accept the break fee over the phone and pay it then and there. I was lucky enough to have a break fee of zero

Q&A wrote: »

Can I check if they've done this for you? Over the last 2 years I've probably called 4 times and each time they give me the talk of generating the letter and it taking 5-10 working days etc.

Yes, they did. In fact the first lady I spoke to last Monday specifically told me to ring again nearer the end of the week if the letter hadn't arrived, as the quote is only good for about 10 days but once the letter is on file they can see the details. She said I'd then be able to pay any fee by card over the phone, or arrange a transfer if it was above my card limit.
So I rang again on Thursday, was put on hold for a minute, the lady told me the break fee of zero and I happily accepted to pay nothing Just had to wait till Letter 1 arrived so we could sign it and accept a specific rate.

nephster wrote: »

Yes, they did. In fact the first lady I spoke to last Monday specifically told me to ring again nearer the end of the week if the letter hadn't arrived, as the quote is only good for about 10 days but once the letter is on file they can see the details. She said I'd then be able to pay any fee by card over the phone, or arrange a transfer if it was above my card limit.
So I rang again on Thursday, was put on hold for a minute, the lady told me the break fee of zero and I happily accepted to pay nothing Just had to wait till Letter 1 arrived so we could sign it and accept a specific rate.

Get you now. I read it first that you could just phone up and get the break fee there and then like other banks. It's still the same hoop jumping. I was getting my hopes up!

Hi All

I hope I can piggyback on this thread to get some advice on Bank Of Ireland Funding fees.

I am in the process of moving my mortgage from Bank of Ireland (3 years fixed, contract finishing in Oct 2020) to Ulster Bank. Bank of Ireland has stated that its funding fees 596 euros.

This feels too high to me, does anybody know how it is calculated? Is there any way around it?

thanks

Time2GetFit wrote: »

Contacted UB a couple of weeks ago regarding breakage fee......like many it took the usual 5-10 days to receive the letter.

Looked at the breakage cost and didn’t make financial sense to change.......we’re 2 years into 4 year fixed at 2.6%. Not the end of the world we’ll sit tight I thought.

Then I notice in the letter it states the rate expires in September 2022 not April 2022 (we drew down in April 2018). Assumed it was an error and contacted them and informed me all was correct. The 4 years Is just a term used but the Loan Offer I signed would have said the date of expiration. Checked and sure enough it says 300922 (in that format).

I’m not denying I signed it etc and not the biggest of deals but surely such a practice is extremely misleading bordering on mis-selling?? Indeed I may have to potentially overpay for a number of extra months than planned should rates continue to have dropped below our current 2.6%. This wasn’t the first time we had switched provider and I’ve never heard of such a practice. My assumption which I feel is reasonable is I was signing up for 48 months at the rate.

Anyone else any experience of it? Thanks all

Ulster always sell a time defined fixed rate and the end date is advertised on almost all promotional advertising.

People need to read what they are signing. You can't use the argument that you "thought"

But 2.6% is fairly decent anyway.

Weighting up switching in the summer when our 3 year fixed with BOI is up which is currently set at 3% and moving to KBC 2.25% assuming can get LTV under 60% which I think we should be able to wrangle. BOI have said best rate they can put us on now is 2.9% but have reached out to branch where we originally took out mortgage to see if they can do better, waiting to hear back on this.

As it is 3% v 2.25% would save us €70 a month on mortgage based on figure KBC provided our monthly payments would be.

A few questions I have:

At the time we took out mortgage with BOI they gave us 2% of our mortgage back within I think it was a month of DD, can they clawback this amount? They are also due to provide us with a further 1% after 5 years (Aug 2022) which is another factor when weighting up decision to switch as will need to forego this payment if move to KBC.

Just got a quote from our solicitor to do the switch and if coming in quite high final total of €1,885. Her fee is fine €900 excluding VAT. There are a few other fees on her quote that never knew about and have been estimated, see below:

Fees to Bank of Ireland to take up Title documents €63.00
Fees to Bank of Ireland to discharge existing mortgage €40.00
Up to date Folio File Plan €40.00
Commissioner for Oaths €30.00
Fees to Land Registry to register Mortgage €175.00
Search Fees (Estimated) €180.00
Planning Search (Estimated) €250.00
TOTAL: €778.00

It is mainly the last 3 I am querying as these are the pricier ones is there any way of saving here? I know we paid Registration Duty of €915 when we originally bought and for Searches of €200, so is it correct we have to pay once again?? It probably is but just annoying is all..

Doing basic maths on this our net saving taking everything into account based off 2 year term would be around €300 was hoping to clear a lot more than this been honest. I suppose the fact we get the 3k switching payment here and now when it is needed is a factor that pushes me towards going ahead with it but have heard of some horror stories of people switching to KBC too.

Sorry about long post and any suggestions on this would be appreciated, thanks.

bugsyb4 wrote: »

Weighting up switching in the summer when our 3 year fixed with BOI is up which is currently set at 3% and moving to KBC 2.25% assuming can get LTV under 60% which I think we should be able to wrangle. BOI have said best rate they can put us on now is 2.9% but have reached out to branch where we originally took out mortgage to see if they can do better, waiting to hear back on this.

As it is 3% v 2.25% would save us €70 a month on mortgage based on figure KBC provided our monthly payments would be.

A few questions I have:

At the time we took out mortgage with BOI they gave us 2% of our mortgage back within I think it was a month of DD, can they clawback this amount? They are also due to provide us with a further 1% after 5 years (Aug 2022) which is another factor when weighting up decision to switch as will need to forego this payment if move to KBC.

Just got a quote from our solicitor to do the switch and if coming in quite high final total of €1,885. Her fee is fine €900 excluding VAT. There are a few other fees on her quote that never knew about and have been estimated, see below:

Fees to Bank of Ireland to take up Title documents €63.00
Fees to Bank of Ireland to discharge existing mortgage €40.00
Up to date Folio File Plan €40.00
Commissioner for Oaths €30.00
Fees to Land Registry to register Mortgage €175.00
Search Fees (Estimated) €180.00
Planning Search (Estimated) €250.00
TOTAL: €778.00

It is mainly the last 3 I am querying as these are the pricier ones is there any way of saving here? I know we paid Registration Duty of €915 when we originally bought and for Searches of €200, so is it correct we have to pay once again?? It probably is but just annoying is all..

Doing basic maths on this our net saving taking everything into account based off 2 year term would be around €300 was hoping to clear a lot more than this been honest. I suppose the fact we get the 3k switching payment here and now when it is needed is a factor that pushes me towards going ahead with it but have heard of some horror stories of people switching to KBC too.

Sorry about long post and any suggestions on this would be appreciated, thanks.

We switched from BOI to UB back in April 2018. We were in a similar position to yourself but we actually broke out of our fixed slightly earlier so was also concerned about potential clawback of the 2%. Spoke with our solicitor who was handling the switch at the time (their fees were €1,280.50 all in) who explained they may / may not try to claw it back but the final redemption figure is what you have to pay to switch and that will include all relative penalties (breakage cost in our case as we were exiting within 3 years) and charges.

Once you pay that figure your contract with BOI is complete and they can’t come back asking for the money they gave at the start.

They didn’t claw back the money in our case. Don’t UB have 2.2% fixed rate you could avail of? If you do go down that route see my post a few above and make sure you know when the rate expires!