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Penalty on Fixed interest mortgage

Now that interest rates are increasing, will I be penalised if I try to change to a provider that hasn’t increased their interest rates? Am I legally bound to the financial institution with whom I have my mortgage

It depends on what type of mortgage you have.  If you have an annuity mortgage – one with which the interest rates go up and down according to the market – then you cannot be charged a penalty for moving.

 

Depending on the wording of your mortgage, if you have a fixed interest agreement with your building society then perhaps they can charge a penalty.

 

My suggestion is that you ask them this question and if they say that there will be penalty gather the papers together and ask the Financial Ombudsman for a direction.  www.financialombudsman.ie

 

Incidentally, to answer the last part of your question, with or without penalty you are legally entitled to change your financial institution as you wish under current competition law.  The only question is - are you obliged to pay the penalty you mention?

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