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Changing From Fixed to Variable?

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  • 08-03-2017 8:47pm
    #1
    kodirl
    Registered Users Posts: 173 ✭✭


    Hi all, I'm looking to change from a fixed to variable mortgage. I am currently on 3yr fixed term with PTSB paying 4.95%. I have 1 year left on this term before it reverts back to variable, (33yrs remaining after next year).

    I have contacted PTSB regarding getting out of the fixed mortgage with the intention of going variable. I received a letter from them today stating "A consequence of your wish to break out of your fixed rate agreement is that the funding arrangements that the bank has put in place for your mortgage will have to be unwound. The cost to the bank of doing this is 0.00Euro. To allow us to proceed with you switch request, we require payment of this amount."

    Does this mean that I won't be penalised if I leave PTSB and switch my mortgage to a different provider?

    Any help/comments much appreciated.


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    #2
    heebusjeebus
    Registered Users Posts: 3,783 ✭✭✭heebusjeebus


    kodirl wrote: »
    Hi all, I'm looking to change from a fixed to variable mortgage. I am currently on 3yr fixed term with PTSB paying 4.95%. I have 1 year left on this term before it reverts back to variable, (33yrs remaining after next year).

    I have contacted PTSB regarding getting out of the fixed mortgage with the intention of going variable. I received a letter from them today stating "A consequence of your wish to break out of your fixed rate agreement is that the funding arrangements that the bank has put in place for your mortgage will have to be unwound. The cost to the bank of doing this is 0.00Euro. To allow us to proceed with you switch request, we require payment of this amount."

    Does this mean that I won't be penalised if I leave PTSB and switch my mortgage to a different provider?

    Any help/comments much appreciated.


    That's sweet. I've just asked the same from AIB. Hopefully will get my letter next week.
    I'd bite their hands off if it was a free move.


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    #3
    James Bond Junior
    Registered Users Posts: 5,136 ✭✭✭James Bond Junior


    kodirl wrote: »
    Hi all, I'm looking to change from a fixed to variable mortgage. I am currently on 3yr fixed term with PTSB paying 4.95%. I have 1 year left on this term before it reverts back to variable, (33yrs remaining after next year).

    I have contacted PTSB regarding getting out of the fixed mortgage with the intention of going variable. I received a letter from them today stating "A consequence of your wish to break out of your fixed rate agreement is that the funding arrangements that the bank has put in place for your mortgage will have to be unwound. The cost to the bank of doing this is 0.00Euro. To allow us to proceed with you switch request, we require payment of this amount."

    Does this mean that I won't be penalised if I leave PTSB and switch my mortgage to a different provider?

    Any help/comments much appreciated.

    At 4.95%, I hope you manage to switch asap, it's a very high rate in today's market.


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    #4
    kodirl
    Registered Users Posts: 173 ✭✭kodirl


    heebusjeebus wrote: »
    That's sweet. I've just asked the same from AIB. Hopefully will get my letter next week.
    I'd bite their hands off if it was a free move.

    So it is a free move?


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    #5
    beechwood55
    Registered Users Posts: 532 ✭✭✭beechwood55


    Ring them and double check.


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    #6
    fachtna
    Registered Users Posts: 5 ✭fachtna


    I'd imagine that PTSB would require you to take out a variable rate with them if they aren't going to charge you the breakage fee.


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    #7
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    kodirl wrote: »
    Hi all, I'm looking to change from a fixed to variable mortgage. I am currently on 3yr fixed term with PTSB paying 4.95%. I have 1 year left on this term before it reverts back to variable, (33yrs remaining after next year).

    I have contacted PTSB regarding getting out of the fixed mortgage with the intention of going variable. I received a letter from them today stating "A consequence of your wish to break out of your fixed rate agreement is that the funding arrangements that the bank has put in place for your mortgage will have to be unwound. The cost to the bank of doing this is 0.00Euro. To allow us to proceed with you switch request, we require payment of this amount."

    Does this mean that I won't be penalised if I leave PTSB and switch my mortgage to a different provider?

    Any help/comments much appreciated.
    Send them a cheque for €0.00 and see what happens.


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    #8
    ArthurG
    Registered Users Posts: 1,306 ✭✭✭ArthurG


    kodirl wrote: »
    So it is a free move?

    That's what your letter says. If you don't believe it then no one here can confirm otherwise. Pick up the phone and call them.


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    #9
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    ArthurG wrote: »
    That's what your letter says. If you don't believe it then no one here can confirm otherwise. Pick up the phone and call them.

    Why call them and let them wriggle out of it? Send in the cheque and then hold them to it.


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    #10
    ArthurG
    Registered Users Posts: 1,306 ✭✭✭ArthurG


    4ensic15 wrote: »
    Why call them and let them wriggle out of it? Send in the cheque and then hold them to it.

    Because that's not what the OP asked. They asked if it was correct, not if they should chance sending a cheque for €0.00 to them.


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    #11
    Peregrinus
    Registered Users Posts: 26,511 ✭✭✭✭Peregrinus


    kodirl wrote: »
    Hi all, I'm looking to change from a fixed to variable mortgage. I am currently on 3yr fixed term with PTSB paying 4.95%. I have 1 year left on this term before it reverts back to variable, (33yrs remaining after next year).

    I have contacted PTSB regarding getting out of the fixed mortgage with the intention of going variable. I received a letter from them today stating "A consequence of your wish to break out of your fixed rate agreement is that the funding arrangements that the bank has put in place for your mortgage will have to be unwound. The cost to the bank of doing this is 0.00Euro. To allow us to proceed with you switch request, we require payment of this amount."

    Does this mean that I won't be penalised if I leave PTSB and switch my mortgage to a different provider?
    I'm afraid not. In fact, it doesn't necessarily mean that you can switch at no cost while remaining with PTSB.

    The wording of the letter suggests that there has been an error. If there's no cancellation fee payable, why are they asking you to make a payment? There could be one of two mistakes here:

    (a) The letter has been generated by a badly-designed system which has failed to recognise that when the unwind cost is zero it makes no sense to ask for a payment.

    (b) The unwind cost is not zero; it has just been mistakenly stated as zero in the letter.

    It's obvious that one of these two mistakes has been made, but you have no way of knowing which one. The only way of finding out is to ring PTSB and ask them to explain.

    Even if PTSB confirms that, yes, you can switch from fixed to variable at a nil cost, it doesn't necessarily follow that they would let you simply pay off the mortgage at nil cost. The nil cost may be something they offer in order to retain your business; if you're not taking out a replacement loan with them they may not offer it.

    Or, they may. Again, the only way to find out is to ask them.


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    #12
    Fian
    Registered Users Posts: 2,192 ✭✭✭Fian


    Peregrinus wrote: »
    I'm afraid not. In fact, it doesn't necessarily mean that you can switch at no cost while remaining with PTSB.

    The wording of the letter suggests that there has been an error. If there's no cancellation fee payable, why are they asking you to make a payment? There could be one of two mistakes here:

    (a) The letter has been generated by a badly-designed system which has failed to recognise that when the unwind cost is zero it makes no sense to ask for a payment.

    (b) The unwind cost is not zero; it has just been mistakenly stated as zero in the letter.

    It's obvious that one of these two mistakes has been made, but you have no way of knowing which one. The only way of finding out is to ring PTSB and ask them to explain.

    Even if PTSB confirms that, yes, you can switch from fixed to variable at a nil cost, it doesn't necessarily follow that they would let you simply pay off the mortgage at nil cost. The nil cost may be something they offer in order to retain your business; if you're not taking out a replacement loan with them they may not offer it.

    Or, they may. Again, the only way to find out is to ask them.

    call them, if it is zero cost then switch to SVR if that is what you want to do.

    then go ahead and switch if you decide to switch, once you are on an SVR the break fee will not apply, similarly if you wanted to prepay.


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    #13
    van_beano
    Registered Users Posts: 1,345 ✭✭✭van_beano


    Any update on this? Contacted AIB myself to see if I can break a 5 year fixed (3.8%) with 3 years remaining in order to move to a LTV variable (3.3%). Waiting for letter to see breakage costs.

    Anyone have knowledge or experience with breaking fixed rates and is it pricey? Tried an online American calculator and it suggested €3k-ish, be great if it were €0!


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