Fixed rate breakage

worlds goodest teecher

Hi,

Do all fixed rate mortgages have allowance for breakage? 18 months of fixed rate with UB, being transferred to PTSB. Could do with breaking and fixing for longer than 18 months.

Contacted UB online and they sent me instructions to see my eligibility online. It said I wasn't eligible for online changing.

My question: is it possible to make changes to any mortgage?

Thanks

Q&A

Yes, you can break out of any mortgage. The bank may charge you a break fee. However, there are regulations governing how that break fee is calculated.

There is an option to refix online if you're close to the end of a fix. It signs like you were directed to that. Bot for those who aren't at the end of a fixed term phone Ulster Banks dedicated mortgage number and ask for a break quote. They won't be able to tell you over the phone but will send you 2 letters. The letters are confusing.

One letter will have a range of interest rate options. And how much you will save/cost you. There will be a reference to break fees here. These are not relevant they are examples.

The other letter will specifically address what your break free is. Don't get the letters mixed up they are confusing - perhaps designed that way - but only the second letter will have your actual break fee

Very likely to be zero given the way interbank rates have moved.

Assuming the break fee isn't too bad you can use the form in the first letter to refix for a longer term.

walterking

As you fixed 18 months ago and cost of funds rates were very low, it is very likely that there is no break fee

But act extremely quickly. I suspect that most banks will be announcing changes after the ecb decision on Thursday. That might be 0.75%

worlds goodest teecher

Thanks for all that. Is it possible to do this over the phone?

Mongfinder General

Email your branch - now. If no response by lunch time tomorrow - drop in to them.

worlds goodest teecher

I spoke with them this morning. They are posting out their offers. I would be looking for a green rate as well as we have brought our home up to B2 since we bought

worlds goodest teecher

https://www.boards.ie/discussion/comment/119576239#Comment_119576239

Thanks. Am expecting the first of these letters within a couple of days. Will these letters be an actual offer? If I accept and post acceptance on Wednesday or Thursday and ecb announces increase Thursday followed by banks, would this be acceptance of their offer?

We fixed at 2.6%

Q&A

https://www.boards.ie/discussion/comment/119579291#Comment_119579291

Yes, one letter will give you the rate options - basically what they currently offer (it will include references to break fees but these are what the break fee could be of you tried to break out of those alternative options - they're nothing to do with your current fixed rate. They are meant to be a guide but it can be very confusing). You'll have the option to tick the term you want. There should be a return envelope included in the pack. I imagine you will get this letter first (but could be wrong). It's a mail merge whereas your current break fee calculation is a bit more involved.

The second letter will tell you how much it is to break out of your current fixed rate now. This might take longer to arrive but once the letter is generated when you phone they should be able to tell you the break fee over the phone. The break fee will only apply for a short period (10-14 days I think).

I suggest phoning them when letter 1 arrives. Confirm break fee is zero/small and then sign and return. Not sure if they'd take a scanned version might be worth exploring.

Sunrise_Sunset

https://www.boards.ie/discussion/comment/119579291#Comment_119579291

The offer in the letter will be valid for a certain number of days. You'll need to reply within that time frame before the offer expires.

worlds goodest teecher

Thanks for all that.

I assume that considering the current global uncertainties and imminent interest rate increases, that I am doing the right thing?

I would say that I recieve their offers Thursday/Friday. I'll call them for the breakage fee, assess, sign and return. Will the offer be open for a short period of time regardless of any expected rate hikes are announced?

walterking

I'd reply within minutes of getting the options

There will not be a break fee.

I'd fix for as long as possible

If 60% loan to value the 10year rate of 2.8% is very attractive. Even the 2.95% 80% ltv for 10 years is good.

Medium term, the ecb wants rates of 1.5-2%, banks will want 2.5%, so in the medium term mortgage rates will be about 4%.

Henry Ford III

As always fix for certainty and not for profit.

walterking

https://www.boards.ie/discussion/comment/119582796#Comment_119582796

I agree.

But if there's a financial benefit, that's a double bonus.

worlds goodest teecher

Didn't get the first letter today so hopefully it will arrive tomorrow

worlds goodest teecher

https://www.boards.ie/discussion/comment/119581514#Comment_119581514

The first letter arrived today. Current 4yr rate 2.6%. They offered 4yr (2.45%), 5yr (2.45%), 7yr (2.95%), 10yr (2.95%). the 7 & 10 would €30 extra per month on what we are currently paying. I rang and they confirmed no breakage fee. Offer open till Friday. If i ring before Friday to change I can post the letter then. 10yr?

Sunrise_Sunset

https://www.boards.ie/discussion/comment/119608321#Comment_119608321

Personally I would go for the 7 or 10 year, yes. We had the option of 5 years at 2.8% or 7 years at 3%. The only thing I regret about fixing is not going for the 7 year option. As one of the above posters said, fix for certainty, not for profit.

worlds goodest teecher

https://www.boards.ie/discussion/comment/119609278#Comment_119609278

That's my thinking. If I were to come out of the current fixed rate in 18 months god knows what the variable will be.

worlds goodest teecher

https://www.boards.ie/discussion/comment/119609278#Comment_119609278

They stated a higher loan to value in their offer (88%) to what is on our online acc (66%). Impact?

walterking

what is the current mortgage balance and how many years are left on it? This will have a bearing on what is best value.

I'll guess circa 10 years and circa €190,000 balance (this would give a €30 difference between 2.6% 2.95%)

If there are 10+ years left and you are unlikely to move. 2.95% for 10 years is a great rate and gives huge certainty.

worlds goodest teecher

https://www.boards.ie/discussion/comment/119610242#Comment_119610242

I am just waiting to talk to them to fix at 10yrs 2.95%. Dues to a preexisting illness I had difficulty getting a mortgage, UB offered, we grabbed. Wouldn't want to go through the process of changing lender.

worlds goodest teecher

https://www.boards.ie/discussion/comment/119610242#Comment_119610242

178000 around 22yrs left. Current 867/month. 10yrs at 2.95% 903/month.

walterking

https://www.boards.ie/discussion/comment/119611764#Comment_119611764

I'd go for the 10 year rate. Takes every bit of stress out for a very small rise

worlds goodest teecher

https://www.boards.ie/discussion/comment/119613280#Comment_119613280

Yeah, went with the 10 Yr. Rang to confirm this morning , just have to post letter tomorrow.

staples7

In a similar position, on 2.25% now. Fixed until early 2025 with Ulster but would like security of a longer term. Repayments currently €685. This would move to €735 on 10yr fixed at 2.8%.(so 50 extra a month) Breakage few confirmed at 0 this week. could do 5yrs at 2.35% but I think I may regret it.

about 27yrs remaining but would hope to start overpayments soon. We also wouldn’t be in a great position to switch at a later stage.

zippyddog

Hi All,

I'm Looking for similar advice regarding Fixing Mortgage Rate.

My Current Mortgage Balance : 260K, 20 Yrs Remaining, LTV 61-80%

Currently on 2.9% Fixed Term Ending December, Repayments €1,538

BOI are offering me the below Fixed options:

1, 2 Yrs @ 2.9%

3, 5 Yrs @ 3.0%

10Yrs @ 3.3%

Based on reading thread above the 10yrs @ 3.3% seems a bit high, but I don't have the option to switch provider based on current circumstances.

Should I just opt in for 10 years for "certainty" regardless? Would cost an extra €52 pm

Thanks!

N