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Breaking fixed rate mortgage half way... to get new mortgage with same bank

  • 24-04-2021 4:39pm
    #1
    whiskeyman
    Registered Users, Registered Users 2 Posts: 12,564 ✭✭✭✭


    Currently moving house.
    Need to break current mortgage fixed rate.
    Am half way through 5 year term.
    Currently applying with same bank (KBC) for mortgage on new property.
    I've to pay a break funding fee of approx 7k!

    Anyone ever successful negotiate it down or discount given I'm keeping my business with them?

    Thanks


Comments

  • #2
    Q&A
    Registered Users, Registered Users 2 Posts: 561 ✭✭✭Q&A


    All you can do is ask and see where it gets you.

    Given cashback offers available with other banks might it be worth shopping around, especially if they're not willing to play nice.

    Showing KBC your serious about moving elsewhere (mortgage approval from another lender) can't really hurt your cause.


  • #3
    coathanger
    Registered Users, Registered Users 2 Posts: 267 ✭✭coathanger


    We did this with EBS & they charged us the breakage fee but they reduced the term on our new mortgage with them so you may be lucky !


  • #4
    MarkR
    Moderators, Regional Midwest Moderators Posts: 11,135 Mod ✭✭✭✭MarkR


    whiskeyman wrote: »
    Currently moving house.
    Need to break current mortgage fixed rate.
    Am half way through 5 year term.
    Currently applying with same bank (KBC) for mortgage on new property.
    I've to pay a break funding fee of approx 7k!

    Anyone ever successful negotiate it down or discount given I'm keeping my business with them?

    Thanks

    If it's a new mortgage on a new property, aren't you selling the old one? Wouldn't that clear you for the new one?


  • #5
    pocketse
    Registered Users, Registered Users 2 Posts: 142 ✭✭pocketse


    We did this with bank of ireland 3 years ago. They waived the fee as we were keeping our business with them. On a practical level we have two mortgage payments every month with them on same property. 1st amount for the outstanding mortgage on previous property at the terms we had fixed at and second one for the price difference in new property.

    That 7 grand would annoy the hell out of me. Would make me want to move provider id at all possible.


  • #6
    Bobeagleburger
    Registered Users, Registered Users 2 Posts: 45,649 ✭✭✭✭Bobeagleburger


    7k with 2.5 years left? Seems big.

    It would kill me to hand it that over for breakage. You might be able to to break for much much less if you waited longer.


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  • #7
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    Can you ask KBC if you can carry over the fixed rate mortgage outstanding to your new property and then get a 2nd loan for the balance.


  • #8
    spion1892
    Registered Users Posts: 5 ✭spion1892


    Worth knowing that rules introduced as part of new European Union mortgage regulations back in 2016, mean banks can only recoup what they might lose by allowing you exit the fixed rate contract. They can’t charge you any additional penalties.

    The amount they can charge will depend on the interbank rate the bank was on the hook for when they issued your mortgage. I'm not saying the €7K is wrong, but get them to show you how it related to their costs.

    Lenders operating in Ireland must also abide by the requirements of the Central Bank’s Consumer Protection Code 2012. This means that lenders must include, within the loan documentation, a worked example, specific to each individual customer, showing how an early redemption charge is calculated and how much it might be.


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