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05-04-2019, 00:28   #31
KKV
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Quote:
Originally Posted by bazz26 View Post
I assume the original amount borrowed was 145k rather than the amount owing with 18 months to go.



I re-read it again, and I think he means 18 months remaining of his fixed term? I'm not sure, to be honest. Would make more sense than my initial thought process of it.
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05-04-2019, 00:30   #32
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05-04-2019, 04:14   #33
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Just to clear some things up I think people are confused by .

There is a specific formula the banks are supposed to use to calculate your break fee from a fixed mortgage and it’s calculated on the interbank rate when you took out the loan v the day you request the cost for breaking.

That fee is the same whether you are switching to another product with the same bank or moving to another bank.

Obviously moving to another bank has other costs including valuation and solicitor fees.

Two examples that I know of personally is one person who took a 700k mortgage with Ebs (variable rate) and got 2% cash back, switched to boi 4 months later and also got 2 % cash back (fixed rate) and then had a no fee break from boi 6 months later to move to ub getting 1,500 from them to cover switch costs and fix f at the 5 year 2.5% rate. Pretty easy net 25k or so.

Another person had fixed at 3% with ub a few weeks before they brought out a 2.6% fixed rate, they wouldn’t move him , advised him to request a break fee, hey presto it was 0 so be broke and refixed at the lower rate and I believe did it again to get the 2 year 2.3%.

All depends on interbank rates and if switching banks the size of your mortgage to see if it makes sense to do the switch for cash back etc
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05-04-2019, 06:25   #34
cojomo2
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Originally Posted by KKV View Post
Am I reading that right? You've got a €145,000 mortgage, and 18 months left on it (ie: about €8,000 per month?).


Surely, if you're doing such massive payments, you wouldn't care what the interest rate was, because you'll be paying a trivial amount anyway, at the speed with which you'd be blowing through the mortgage?
18 months left on the fixed term.
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05-04-2019, 06:36   #35
Marcus Rashford
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- Banks are now compelled to use a set methodology to calculate fixed mortgage break fees; with interest rates relatively low and base rates plus bank funding costs so low, the methodology tends to yield a favorable result

- Some banks will pay up to 3% of the value of the mortgage to switchers (with the final 1% payable down the line)

- Legal fees for a switch tend to be okay; €1,500 seems to be the typical number

- There are people who have switched two or three times in the space of 6-12 months and pocketed the incentive each time
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05-04-2019, 07:36   #36
KD11
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Went in to boi last week and was told the break out fee with less than a year left on a 5 year fixed term for a very small mortgage was €590. The person I was dealing with was shocked as she was expecting it to be a "couple of euro" at most. It annoyed me so much I'm now in the process of switching banks.
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05-04-2019, 07:44   #37
cojomo2
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Originally Posted by KD11 View Post
Went in to boi last week and was told the break out fee with less than a year left on a 5 year fixed term for a very small mortgage was €590. The person I was dealing with was shocked as she was expecting it to be a "couple of euro" at most. It annoyed me so much I'm now in the process of switching banks.
I dont think its anything to do with BOI, as stated by another poster a specific formula is used to calculate..the amount to break will change daily depending on interbank rates.
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05-04-2019, 08:21   #38
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Quote:
Originally Posted by KD11 View Post
Went in to boi last week and was told the break out fee with less than a year left on a 5 year fixed term for a very small mortgage was €590. The person I was dealing with was shocked as she was expecting it to be a "couple of euro" at most. It annoyed me so much I'm now in the process of switching banks.
I had to pay I think 1200 before with UB to switch from one fixed to another but it still worked out cheaper in the long term.
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05-04-2019, 08:40   #39
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Hi,
i have just changed my mortgage from AIB and BOI and my costs were;
solicitor 1500
valuation 150
There were additional costs as i was putting on extension but they can be ignored for this conversation.

I got cashback of 2% plus if i stay for 5 years i get another 1% back. Well worthwhile for me to do even if i do not stay for the 1%.

For me i will be getting roughly 7k cashback (not including the 1%) which would mean that i would have to earn 14K before tax to earn this. If you divided that by the 15 hours work that i did it would effectively mean my gross wages per hour is effectively €933 per hour. WIsh my main job paid so well.

My changeover was more complicated as we were building but i would estimate about 10-15 hours work in total. Other person in work rang around for herself but she changed rates with the bank that she was with over the phone in 5 mintutes and saving 100 per month.

Big savings to be had though for small amount of work. However in order to make a "profit" you have to have a large mortgage. Looked at details for another person and they had smallish mortgage of 100k and no profit in moving even though drop in interest rate from 3.2% to 2.9%.

Also what people have to be aware of is the lowish fixed rate interest rates out there. Some of the lower banks have higher variable, so when your say 2 year fixed is over and then you might have to change banks again and you may lose all your savings with the solicitor fees.

Cant understand why more people dont look at these options, especially with Loan to value ratio with the massive increase in "valuation". We had nearly a 55% LTV and we were paying the higher >80% interest rate. NO solicitor fees for moving within the same bank.


I am in month 2 of the mortgage and was looking at options for changing once my 1 year fixed is up (10 months time) but from this thread i can do it at relatively low cost which is great to know.
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05-04-2019, 08:40   #40
flugel
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When switching Mortgage providers do you also have to take out a new mortgage protection policy?

The original hardly stays valid as you are entering into new contracts with new mortgage providers each time?
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05-04-2019, 08:46   #41
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Originally Posted by cruizer101 View Post
Its not separate at all, if moving bank it has to be taken into account. Generally the bigger saving will be by moving bank, and any cashback type offers will require moving bank also.
You dont necessarily have to move bank though.

I've lowered my rate twice by revaluing the house and getting a better ltv rate.

Way less hassle then moving banks.
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05-04-2019, 08:52   #42
nok2008
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All you need to do is reassign your current mortgage protection to the new provider. A phone call to arrange and they send the documents out for signing. The new bank will try to get you to change but will more than likely be dearer as you are older and more risk.

You will also have to assign the new mortgage provider to your house insurance.
The above assumes no increase in amount being drawn down.
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05-04-2019, 09:00   #43
cruizer101
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Originally Posted by bazz26 View Post
Another tip for paying less interest over the term of the mortgage is to look at paying a little extra every month off the capital amount borrowed, on top of your normal mortgage payment. Even if your in a fixed rate term you can still pay upto 10% extra of your monthly repayment without penalty.
Jusr on this the amount you can pay of varies by bank I think the minimum would be 10% of monthly payment. But many are higher, UB who I am with you can overpay 10% of the remaining principle per year. So 300k mortgage you can overpay 30k per year, fair play to anyone who can reach that. I'm pretty sure KBC are the same and other banks may well be more than the 10% monthly.
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05-04-2019, 09:54   #44
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Just a matter to note for people with BOI (or any other bank) wishing to break out of a fixed rate to a lower rate, the charge for breaking from a fixed rate depends on the markets for the day your application is processed. For example, I rang BOI a few minutes ago and there is no fee if you applied had your application granted today however next week there could be a charge (it shouldn't change too drastically unless there is some huge shift in the markets but with Brexit, god only knows what may happen) Anyway I have asked them to send me out the paperwork and will decide from there. I would save €20 a month dropping to the 2.9% rate from my current 3.1% rate which I've been in for the last 2 years. My fixed rate is due to end in October this year.
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05-04-2019, 10:46   #45
KD11
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Originally Posted by cojomo2 View Post
I dont think its anything to do with BOI, as stated by another poster a specific formula is used to calculate..the amount to break will change daily depending on interbank rates.
She did say that but had no idea why some people have to pay a few euro and others a few hundred euro. One customer wanted to break 6months into a 3yr term (€300,000) and it actually cost them zero. Like someone else mentioned it can change week by week what figure you get. If i have to pay that amount anyway, I may as well switch banks.
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