Breaking fixed interest rate when selling

ndilly

We are selling our apartment and we have a 1 year fixed interest rate until July. I am aware there will be a redemption fee for breaking this but is this the only fee or is there something else. Will what we have left on our mortgage be close to what we owe once we sell or is there another charge.

Askthe EA

ndilly wrote: »

We are selling our apartment and we have a 1 year fixed interest rate until July. I am aware there will be a redemption fee for breaking this but is this the only fee or is there something else. Will what we have left on our mortgage be close to what we owe once we sell or is there another charge.

There are definitely charges for settling your mortgage early but they range from bank to bank. Call them.

heebusjeebus

AIB will only send the break out fee in a letter.
They cannot tell you over the phone cos the sums are so tough or something!

thereality

There will be a fee. AFAIK it is a prorata basis. If you end up closing in March or April, the fee might be quite

FYI don't fix your next mortgage, as rates are going down at the moment

The_Conductor

thereality wrote: »

There will be a fee. AFAIK it is a prorata basis. If you end up closing in March or April, the fee might be quite

FYI don't fix your next mortgage, as rates are going down at the moment

Rates are going up- most lenders have highlighted this- and as of today, the ECB QE programme is halved.

The writing is on the wall for abnormally low rates.

Cyrus

lots of misinformation here,

the break fee such as it is, is now defined by a specific formula, see below.

Whats important is that for a recent fix, the difference between R and R1 is likely to be 0 or very close to it, therefore the redemption fee will most likely be nil or negligible.

equal to “C” where:
C = Ax (R% - R1%) x D / 365
and
“A” = the amount repaid early (or the amount which is
changed from the fixed rate to a new rate) averaged
from the date of early repayment (or rate change)
to the end of the fixed rate period to allow for
scheduled repayments (if there are any) and interest
charges.
“R%” = the annual percentage interest rate which was the
cost to us of funding an amount equal to “A” for the
originally intended fixed rate period.
“R1% ”= the annual percentage interest rate available to us
for a deposit of an amount equal to “A” for a period
equal to “D”.
“D” = the number of days from the date of early repayment
(or rate change) to the end of the fixed period.

dubrov

As Cyrus says, the breakage fees have nothing to do with the fixed rates that are currently being charged by the bank.

They are more based on the cost of funding of the bank now versus when you took out the loan.

Chances are there will be no breakout fee at all.