AIB - Overpaying on Fixed Rate

R

RandomName

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Hi,

I currently have a mortgage with AIB, 5 year green fixed 2.35%.

My query relates to the possibility of overpaying on this mortgage. I read on here recently that the overpayment charge can often be zero for this mortgage. I enquired and received the confirmation letter saying that the charge for me would be 0. However, does this mean that I can overpay and remain on the fixed rate? Or would I have to move to a variable rate?

Regards
 
It means that you can overpay and remain on the fixed rate.

However, there is a time period in which the 0% break fee applies.

So overpay what you want to pay immediately.

The next time you want to make an overpayment, there might be a fee. It depends on how market rates move in the background.

Brendan
 
Hi Brendan,

Thanks for your response.

I spoke on the phone to someone in their mortgage department who said that if I overpayed I would have to switch off the fixed rate. However, she also said she would confirm this and post me out the confirmation either way. Is there any documentation you can point me to which I could use to make this point with them?

I understand that the breakage cost is valid for 5 days only. The person who I spoke to said that I could email the overpayment form to them in order to make sure it is received within this 5 days

Also, my understanding of AIB's breakage calculation is that it takes into account the difference between your current rate and the fixed rate for the time period remaining on your mortgage. I would suspect therefore that unless any of their fixed rates drop below the green rate of 2.25/2.35 (LTV dependent) then the calculation would always return a cost of 0. Do you have any more knowledge of this?

Thanks again
 
RandomName said:
I spoke on the phone to someone in their mortgage department who said that if I overpayed I would have to switch off the fixed rate.
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This is completely incorrect in my view, and I'd be interested to see if you receive anything confirming their view.


RandomName said:
Also, my understanding of AIB's breakage calculation is that it takes into account the difference between your current rate and the fixed rate for the time period remaining on your mortgage. I would suspect therefore that unless any of their fixed rates drop below the green rate of 2.25/2.35 (LTV dependent) then the calculation would always return a cost of 0.
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Yes, absolutely correct. This contractual calculation is unique to AIB.
 
RedOnion said:
This is completely incorrect in my view, and I'd be interested to see if you receive anything confirming their view.
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The person on the phone didn't sound absolutely certain themselves so I will see what the verdict is

RedOnion said:
Yes, absolutely correct. This contractual calculation is unique to AIB.
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Seems almost too good to be true then, and the best of both worlds? Low fixed rate but retaining the ability to overpay. It feels like this should be more common knowledge as it surely makes this mortgage the most attractive on the market, bar maybe avant
 
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