askingformyself
New Member
- Messages
- 3
Hello,
I'm aware of AIB's recent announcement that you can pay up to €5k per calendar year without incurring fees (which suggests that anything over €5K may incur fees). I don't plan to reduce my term, just reduce the balance.
My circumstances:
- 5 year 2.45% fixed Green Rate mortgage with AIB. Mortgage began 2020, will expire 2025. I understand I can overpay by (at least) €5000 in 2023, 2024 and 2025.
- I have cash sitting in the credit union where I worry that interest is eating away at it. I have other investments too.
- I have no other debt.
As per AIB's FAQ (Can I make an Overpayment on my Mortgage?):
"Any additional overpayments above €5,000, or early full redemption of your mortgage loan, may result in an early repayment charge if you are on a fixed rate".
"For fixed rate customers please be aware that an early repayment charge may occur if you pay a lump sum or wish to reduce your mortgage term."
My Questions:
I'm aware of AIB's recent announcement that you can pay up to €5k per calendar year without incurring fees (which suggests that anything over €5K may incur fees). I don't plan to reduce my term, just reduce the balance.
My circumstances:
- 5 year 2.45% fixed Green Rate mortgage with AIB. Mortgage began 2020, will expire 2025. I understand I can overpay by (at least) €5000 in 2023, 2024 and 2025.
- I have cash sitting in the credit union where I worry that interest is eating away at it. I have other investments too.
- I have no other debt.
As per AIB's FAQ (Can I make an Overpayment on my Mortgage?):
"Any additional overpayments above €5,000, or early full redemption of your mortgage loan, may result in an early repayment charge if you are on a fixed rate".
"For fixed rate customers please be aware that an early repayment charge may occur if you pay a lump sum or wish to reduce your mortgage term."
My Questions:
- Is there a way, other than calling AIB to confirm if an overpayment will incur a fee? I find the wording very confusing. I have called them 6 days ago to ask about overpaying by €10K, they said they could not answer on the phone and needed to send a letter. I am still waiting on the letter to arrive.
- Just because you CAN overpay, does it mean you SHOULD? I appreciate it's not a straight forward question. I am trying to understand what the experts on this forum take into account when answering it. I am leaning toward overpaying by more than €5k per calendar year while I can. Why? I understand interest rates will unlikely be back down at 2.45% in 2025 when the fixed rate ends. I would like to think long-term and save on interest costs once I get off the fixed rate.