Newtotheworld
Registered User
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This doesn't really make sense.Do i have to put my original monthly amount put back every time i over pay to get the benefit of overpaying.
if i overpay and the amount i pay back each month is reduced rather than the term.This doesn't really make sense.
Please clarify what you mean here.
The effective term is also reducing.if i overpay and the amount i pay back each month is reduced rather than the term.
I still don't really understand what you are trying to do.Example
current payment 1050
For arguments sake I overpay by 5000
new payment 1040
If i overpay 100 euro monthly going forward should I be paying the difference between 1050-1040 =10euro plus my overpayment to get the benefit of overpaying.
Hypothetical Current payment 1050.The effective term is also reducing.
I still don't really understand what you are trying to do.
If you are paying over the expected repayment (possibly adjusted for previous accelerated repayments) then you're continuing to accelerate the loan clearance and effective term.
Thanks. my understanding was, take long term and overpay if when you can. but when they reduce the monthly amount you are also reducing the amount that goes off your principle on the next payments.It's up to you really. Using your example, if your repayment reduces to 1040 a month you can choose to base your overpayment on this amount or 1050. There won't be a huge difference but if you keep overpaying and base your repayments on the original amount then it will accelerate.
But you can also just pay the requested amount if there is a surprise hit some months. That's what I do.
Yes, they recalculate the repayment based on the new capital over the original remaining term. It will reduce the amount of capital and interest you're paying. But as long as there is no break fee due, you can pay whatever amount you like.Thanks. my understanding was, take long term and overpay if when you can. but when they reduce the monthly amount you are also reducing the amount that goes off your principle on the next payments.
Thanks id appreciate thatYes, they recalculate the repayment based on the new capital over the original remaining term. It will reduce the amount of capital and interest you're paying. But as long as there is no break fee due, you can pay whatever amount you like.
I have a spreadsheet somewhere, where instead of the payment being recalculated, the repayment remains static. As you say this accelerates the repayments as more and more goes off the capital each month.
Do i have to put my original monthly amount put back every time i over pay to get the benefit of overpaying
What do you mean by effective term? If there's 30 years remaining and the overpayments only reduce the monthly repayment and not the term, there's still 30 years remaining.The effective term is also reducing.
Sorry, my mistake.What do you mean by effective term? If there's 30 years remaining and the overpayments only reduce the monthly repayment and not the term, there's still 30 years remaining.
What is the difference between term and effective term?
No and the reason why was explained to you hereI am on AIB Green rate 2.15% and looking to overpay a lumpsum.
Any idea if there will be a break fee?
Thanks
Thanks for this.No and the reason why was explained to you here
https://www.askaboutmoney.com/threa...rate-and-some-other-rates.222401/post-1808976
I am on AIB Green rate 2.15% and looking to overpay a lumpsum.
Any idea if there will be a break fee?
Thanks
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