Key Post How overpaying a ptsb mortgage works

Hi Just to update this thread for those that are thinking of staying with PTSB.
I have a worked example to make it easier to explain.
I was comparing AIB @2.15% borrowing 300k over 30 years
And PTSB@ 3.00% borrowing 269k over 30 years.
If you go with PTSB and borrow 269k vs AIB (300k) you will end up paying 32k more in interest over the course of the loan with ptsb.
You borrow less but pay more in interest for less money due to higher interest rate.
That's the power of interest!!!
 
Hi, I'm thinking of going with this option and was wondering if I understood this correctly.
As an illustrative example, if I overpay by 1000 a month in a 5 year fixed mortgage I will have 60,000 built up in a credit account by the end of the 5 years.
At the point the fixed rate finishes can I then offset this 60,000 against the outstanding capital or does it remain in a credit account when the mortgage switches to a variable rate?
For simplicity imagine that there is 100,000 capital remaining at the end of the 5 year fixed term and I have 60,000 in my credit account. Can I then pay 40,000 to clear the remaining capital and close the mortgage or is this not a possibility?
Thanks
 
philanthropist9 said:
Hi, I'm thinking of going with this option and was wondering if I understood this correctly.
As an illustrative example, if I overpay by 1000 a month in a 5 year fixed mortgage I will have 60,000 built up in a credit account by the end of the 5 years.
At the point the fixed rate finishes can I then offset this 60,000 against the outstanding capital or does it remain in a credit account when the mortgage switches to a variable rate?
Click to expand...
Yes, you can offset the €60k against the outstanding balance.

Alternatively (even while you are still on the fixed rate), you can use the credit to take a payment holiday or to reduce the monthly repayments.

philanthropist9 said:
For simplicity imagine that there is 100,000 capital remaining at the end of the 5 year fixed term and I have 60,000 in my credit account. Can I then pay 40,000 to clear the remaining capital and close the mortgage or is this not a possibility?
Click to expand...
Yes, you can do that. You can even clear your mortgage while you are on the fixed rate but you may have to pay a break fee to do so. But the break fee is often low or zero.

Overpaying your mortgage might not be the best use of your money. Your priorities should usually be:
  • Paying off expensive debt (credit cards, personal loans, car loans, etc.)
  • Building up an emergency fund in a savings/current account (3 to 6 months' living expenses)
  • Saving money for any expenses you will have over the next few years (kids; buying a car; childcare; home renovations; adult children going to college, etc.)
  • Maxing out your pension contributions (very large tax relief is given)
  • Overpaying your mortgage
in approximately that order. Consider posting a thread about your situation in the Money Makeover forum.
 
I’m going to refix with PTSB - am I correct that I could use the overpayment to build up these credits (say to take a payment holiday in a year or two) and while these credits are around, PTSB will only charge interest on the net balance? So my monthly payments will have an increased capital repayment component? I find the PTSB brochure very unclear
 
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