Mortgage - low fee for breaking fixed rate

What year did you fix?

The interbank rate at the time of your last contract change has a major bearing.

Just contacted UB and waiting for breakage fee quote. I'm on a good rate fixed until September but would be good to avail of the Avant cashback for solicitor fees.

My UB break fee was close to zero.

I went with the 1.95% rate. 5 years is long enough peace of mind for me. I think it is a toss of the coin as to whether rates will be higher or lower in 5 years.

What happens if you pay breakage fee and avant don’t entertain you?

do you lose the funds?

Seems that most people are getting a low break fee. However, if anyone ends up with a high break fee, there is a chance that Ulster Bank and kbc will be forced to charge zero break fees, later in the year, when mortgages are likely to migrate to the new lender. Hence, if you were in the situation, with a high break fee, you might consider applying for the Avant offer now, so you have approval before 31 March, when the offer expires, but don't drawdown until later in the year. Avant allow this.

I assumed mortgaged with those banks will migrate to a new bank on the same T&Cs. Why would they want or have to zero the break fees if customers aren’t being forced to break?

Is it possible to increase the amount you payback each month and reduce the term of the mortgage when you're switching or would the new bank want to stick more or less to the previous monthly repayment?

Thanks, I'm planning to move from KBC to Avant and will probably look to increase payments at the same time

Pay more, save more

10% annual overpayment allowance so you can save thousands, giving you the option to pay off your mortgage sooner.*

That took me ten seconds.

Thanks

This is interesting. Can you point to where they said this?

Depends on a few things.

How much is your breakage fee?

How much is left on mortgage?

The guys over on Askaboutmoney have some good info. See below for an example from a few years ago.

-------------------------------------------------

So I spoke with KBC today. Their Break formula is:

B = (W - M) x T / 12 x A, where:

B = The Break Funding Fee

W = The Wholesale Rate Prevailing at the date of the existing fixed rate applying to the loan was set

M = The Wholesale Rate prevailing at the switching/redemption date for the unexpired time period of the Fixed Rate Period

T = Period of Time in months to the end of the Fixed Rate Period

A = Principal amount which is subject to the existing fixed rate and which is being switched or redeemed €250,096

So in my case this works out as:

https://www.askaboutmoney.com/threads/kbc-break-funding-cost-calculation.220609/

It can better to keep the longer term you have and just set up a standing order for the extra you want to overpay. You can overpay up to 10% of balance per year so likely over a grand per month and so unlikely to hit that limit. It then gives you flexibility if you ever need to reduce your payment amount down the line. Job loss, kid, fancy splashing a bit on a car or holiday etc.

Got my letter, free to break!

Okay lads, anybody found the cheapest solicitor to use?? :D

Did you telephone your bank requesting breakage fee?

I am looking to break also and unsure how to proceed, i have 3 years left on a 5 year fixed mortgage.

Same as you, UB, fixed 2.6 until june 23.

Got a breakage fee of 600, which will expire in a week, god knows what that figure will be next week!

Break free depends on interbank rates. If it's small or zero this week unless the rates fall over the course of the week your break free should be the same or a little less.

"Monitoring" doesn't fill me with much confidence. Almost a year on and no moves by the central bank. The cashback offer by Avant probably makes it less likely they will act as it will soften the blow for many borrowers. Also say they did decide to restrict break fees what about those who have already jumped? I'm sure Ulster could argue that if the terms and conditions of the mortgage are honoured from their side they shouldn't be penalised any more than another institution. If Ulster really wanted to be cynical they would just stay charging the same rates as PTSB on any new fixes.

The flip side of this is PTSB are going to pay a price based on current conditions is the central bank really going to pull the rug out from underneath them.

Trying to change it now surely creates a headache for too many people.

My fix is up in September but l'm happy to jump now. The cost of breaking pretty much matches the money I'd save from the lower rate. The cashback just seals the deal.

Maxing pension payments (if possible) is a no brainer given the massive tax break. Easiest way to save money.