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 Post subject: Re: Mortgage overpay - who makes it easiest
PostPosted: Thu Jan 05, 2017 5:35 pm 
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Planning Tribunal Attendee

Joined: Sep 15, 2015
Posts: 1471
tradtshirt wrote:
Who makes it easiest? Not AIB anyway.
I transferred money from an AIB current account to an AIB Mortgage account as a test and they decreased the monthly repayment. What I actually expected was for them to decrease the principal.


Are you sure that they weren't doing both? What happens when I overpay on my AIB mortgage is that the principal is reduced, and the monthly repayment reduces (but the term stays the same). You can have them change the term, but you need to fill in a form each time. However, as long as you maintain the same payment every month via overpayments, the effect in either case is more or less the same and the mortgage will be paid off at the same time anyway.


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 Post subject: Re: Mortgage overpay - who makes it easiest
PostPosted: Sun Jan 08, 2017 10:01 am 
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Under CAB Investigation

Joined: May 12, 2012
Posts: 2183
Tangential, but you can overpay a BoI fixed rate mortgage by up to 10% per month without penalty.


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 Post subject: Re: Mortgage overpay - who makes it easiest
PostPosted: Sun Jan 08, 2017 12:35 pm 
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Property Magnate

Joined: Jan 17, 2014
Posts: 621
Quango Unchained wrote:
tradtshirt wrote:
Who makes it easiest? Not AIB anyway.
I transferred money from an AIB current account to an AIB Mortgage account as a test and they decreased the monthly repayment. What I actually expected was for them to decrease the principal.
I inquired and was told that the default if you just transfer to a mortgage account is for the system to decrease the monthly payment. If you want them to decrease the principal you must inform them by letter or email with each adhoc transfer. Alternatively you can set up something regular by prior agreement where they do decrease the principal - however you must stick to the agreed amount every month and advise them again in writing should you wish to go back to paying the basic amount.


I don't see what the issue is here. You can just keep increasing your "overpayments" as your standard payment reduces if you want to pay off the mortgage early; eventually you will pay off the principal. It is more flexible this way, if your financial circumstances worsen in future, you might be glad of the lower standard payments...


I'd have thought the issue is clear: if the principal isn't being reduced by as much as tradtshirt intended, that could interfere with his ability to sell up in a negative equity scenario. We've lived through a sudden house price collapse.

The idea is that tradtshirt might get an offer on his house that would almost clear the mortgage, but he might owe just that little smidgen too much principal.

If I'm missing something, please point it out.


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 Post subject: Re: Mortgage overpay - who makes it easiest
PostPosted: Mon Jan 09, 2017 10:34 am 
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Under CAB Investigation

Joined: Mar 31, 2009
Posts: 1919
With BoI you can do it through online banking but have to call them every time to say you'd like it off the principal. I asked if they could put a standing instruction/note on the account to say that any overpayment automatically comes off the principal...but computer said no.


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 Post subject: Re: Mortgage overpay - who makes it easiest
PostPosted: Mon Jan 09, 2017 10:54 am 
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Old Time Landlord

Joined: Aug 21, 2007
Posts: 377
Joe-Levity wrote:
Quango Unchained wrote:
tradtshirt wrote:
Who makes it easiest? Not AIB anyway.
I transferred money from an AIB current account to an AIB Mortgage account as a test and they decreased the monthly repayment. What I actually expected was for them to decrease the principal.
I inquired and was told that the default if you just transfer to a mortgage account is for the system to decrease the monthly payment. If you want them to decrease the principal you must inform them by letter or email with each adhoc transfer. Alternatively you can set up something regular by prior agreement where they do decrease the principal - however you must stick to the agreed amount every month and advise them again in writing should you wish to go back to paying the basic amount.


I don't see what the issue is here. You can just keep increasing your "overpayments" as your standard payment reduces if you want to pay off the mortgage early; eventually you will pay off the principal. It is more flexible this way, if your financial circumstances worsen in future, you might be glad of the lower standard payments...


I'd have thought the issue is clear: if the principal isn't being reduced by as much as tradtshirt intended, that could interfere with his ability to sell up in a negative equity scenario. We've lived through a sudden house price collapse.

The idea is that tradtshirt might get an offer on his house that would almost clear the mortgage, but he might owe just that little smidgen too much principal.

If I'm missing something, please point it out.


As I understand it you always decrease the principal with any AIB overpayment.

The choice then is between reducing the term and keeping the monthly payment the same, or keeping the original term and reducing the monthly payment. The default is the latter but you can get them to change the behaviour for your account to the former.

I personally prefer to keep the term the same for the reasons Quango gives above.


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 Post subject: Re: Mortgage overpay - who makes it easiest
PostPosted: Mon Jan 09, 2017 12:50 pm 
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Planning Tribunal Attendee

Joined: Apr 21, 2008
Posts: 1488
tradtshirt wrote:
Who makes it easiest? Not AIB anyway.
I transferred money from an AIB current account to an AIB Mortgage account as a test and they decreased the monthly repayment. What I actually expected was for them to decrease the principal.
I inquired and was told that the default if you just transfer to a mortgage account is for the system to decrease the monthly payment. If you want them to decrease the principal you must inform them by letter or email with each adhoc transfer. Alternatively you can set up something regular by prior agreement where they do decrease the principal - however you must stick to the agreed amount every month and advise them again in writing should you wish to go back to paying the basic amount.


If your monthly repayment dropped then surely that's because the overpay was used to pay off the principal?

Pay off principal, term remains the same= lower monthly payments
Pay off term, monthly payment will be the same = fewer monthly payments

Unless by saying your monthly repayment dropped you mean they treated it as an advance payment rather then an overpayment and simply didn't charge you until it was used up?


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 Post subject: Re: Mortgage overpay - who makes it easiest
PostPosted: Mon Jan 09, 2017 5:28 pm 
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Neo Landlord

Joined: Mar 3, 2009
Posts: 220
poohbear wrote:
With my AIB mortgage I just transfer money from current account to mortgage.

Only thing I dislike about AIB is I can't get my mortgage info online as I haven't got an AIB current account. Paper statements only.


I don't have an AIB current account either, but I do have a savings and masterplan account and I was able to add our mortgage account to my online banking (not sure why I did this as it just depresses me when I log in :shock: )


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 Post subject: Re: Mortgage overpay - who makes it easiest
PostPosted: Mon Jan 09, 2017 5:46 pm 
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Old Time Landlord

Joined: Aug 21, 2007
Posts: 377
shweeney wrote:
poohbear wrote:
With my AIB mortgage I just transfer money from current account to mortgage.

Only thing I dislike about AIB is I can't get my mortgage info online as I haven't got an AIB current account. Paper statements only.


I don't have an AIB current account either, but I do have a savings and masterplan account and I was able to add our mortgage account to my online banking (not sure why I did this as it just depresses me when I log in :shock: )


Fair enough! I do know I can't get one with just the mortgage. Maybe I'll open a savings and not put anything in it.


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