Mortgage Overpayment AIB Fixed

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Interest%

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Can you actually overpay AIB Fixed term mortgage.
I'm with ptsb on a fixed and you can overpay until your heart is content no penalty and the overpayment sits as credit on the account and the interest is reflected as if the credit was taken off the capital balance(i think) and then it stays there until you instruct them to use it to reduce the term or monthly repayment.

How can I overpay An AIB 5 Yr green 2.15% Fixed term rate every month like I am doing now with ptsb.

Thanks
 
I'm with AIB and don't believe you can't do that any overpayments have to advised to either lower monthly repayment or the term.
 
Interest% said:
Can you actually overpay AIB Fixed term mortgage.
I'm with ptsb on a fixed and you can overpay until your heart is content no penalty and the overpayment sits as credit on the account and the interest is reflected as if the credit was taken off the capital balance(i think) and then it stays there until you instruct them to use it to reduce the term or monthly repayment.

How can I overpay An AIB 5 Yr green 2.15% Fixed term rate every month like I am doing now with ptsb.

Thanks
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Yes you can. I made a lump sum payment earlier this year while on a fixed rate. In theory you need to check with them first that no break costs will arise.
 
I wouldn't make a lump sum repayment on any mortgage, but especially a fixed rate mortgage, without checking the details and arranging it with the lender first. With a fixed rate mortgage you could trigger penalty charges by doing it unilaterally.
 
Il rephrase. Has anyone who HAS an AIB fixed rate mortgage had any issues overpaying there mortgage every MONTH.
Not a lump sump, not every year, but every month.
 
I have fixed rate AIB. I send email last week of month asking for breakage fee. I get a letter back saying break fee is zero , then I transfer the funds. The only reason the break fee is zero is because the shofter term rates are higher than my 2.35% rate.
 
Familyman77 said:
I have fixed rate AIB. I send email last week of month asking for breakage fee. I get a letter back saying break fee is zero , then I transfer the funds. The only reason the break fee is zero is because the shofter term rates are higher than my 2.35% rate.
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Break fee is zero, so do you have to break and resign?
Do you do this every month you want to overpay?
What do you instruct them to do with the overpayment.
 
Just checked latest letter and it Is referred as a breakage cost on the letter. as soon as I get the letter I simply transfer from my AIB currant account across to the mortgage account. I give no instructions as by default it reduces my monthly payments as opposed the term. I send the email each time yes
 
The default action of setting up an an additional monthly standing order is to reduce the term of the mortgage. If you prefer to reduce the monthly payment, then you need to instruct them of this and use the overpayment form and select option A. It is a little more tedious but you could just make an quarterly lumpsum overpayment. It's not that much extra hassle.

In either case, while you are on the AIB green rate at 2.15%, it is very unlikely that you will have a break fee because of how AIB calculate it.

Overpayment / re-fix flexibility of AIB's green 5yr fixed rate (and some other rates)

Moderator's note: Because of a quirk in how AIB calculate their break fee / early redemption charge, you can make unlimited overpayments on some of their fixed rates without penalty. Or you can break out of your existing AIB fixed rate and re-fix on a different rate, again without penalty. (You...
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Mortgage Overpayments
Own your home sooner by paying more off your mortgage. You can pay more than your normal repayments off your mortgage with an extra monthly payment or a lump sum payment, or both. Try our Overpayment Calculator to see how much you could save.
Increase your monthly repayment amount

To make an extra monthly payment to your mortgage, you can set up another monthly standing order to your mortgage account through AIB Internet Banking or you can fill out the Overpayment Form. We will reduce the mortgage loan term because of the increase in your monthly repayments to your mortgage.

Make a lump sum payment to your mortgage

You can make a lump sum payment to your mortgage. You can do this through AIB Internet Banking or by filling out the Overpayment Form.

On the Overpayment Form you can choose between two lump sum payment options;

  • Pay a lump sum and reduce your monthly repayment amount

    Your monthly mortgage repayments will reduce in line with the reduced balance of the account. The remaining term and interest rate will stay the same.

  • Pay a lump sum, maintain current monthly repayments and reduce your mortgage term

    Your mortgage loan term will be reduced to keep the monthly repayments at approximately the same level as they were before the lump sum payment. The interest rate stays the same.

If you are on a variable rate you can increase your monthly repayments or make extra payments as an overpayment. If you are on a fixed rate, we may charge you an early breakage cost when you make an overpayment.

All parties to the mortgage must sign the Overpayment Form.
When you have filled in the Overpayment Form please email us at [email protected] or send it to AIB Home Mortgage Operations, Accounts Section, 1 Adelaide Road, Dublin 2. DX 183, Dublin.
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Interest% said:
Break fee is zero, so do you have to break and resign?
Click to expand...
No, break fee and ERC (early repayment charge) are frequently used in place of each other. Your loan agreement doesn't change. You are entitled within that agreement to make an early repayment and they are entitled to charge an ERC. If you request a break fee and don't specify an amount, they will quote you the fee for breaking the full outstanding balance.

But it is proportional so for example, if you are quoted €2k on a balance of €250k, that is 0.8%. If you intend to make a lumpsum of €10k, your break fee would only be €80 (0.8% of €10k)
 
So if they confirm the break fee is zero, you could in theory pay off the full amount and not have any early repayment charges at all ?
Sorry for laboring the point, but just want to confirm that there are no other fees associated with a full repayment other than the 'break fee / early repayment charge' - it appears not.
 
Rasputin said:
So if they confirm the break fee is zero, you could in theory pay off the full amount and not have any early repayment charges at all ?
Sorry for laboring the point, but just want to confirm that there are no other fees associated with a full repayment other than the 'break fee / early repayment charge' - it appears not.
Click to expand...
Yes, if the break fee is zero, you can pay off the mortgage in full (or make a large overpayment) without penalty.

If you pay off a mortgage in full, you have to pay the "vacate fee" to release the deeds and remove the bank's claim from them, but that is only about €50.
 
_OkGo_ said:
In either case, while you are on the AIB green rate at 2.15%, it is very unlikely that you will have a break fee because of how AIB calculate it.
Click to expand...

Probably an obvious question, but good to get confirmation - as interest rates are rising, and set to rise further, my understanding would be that the likelihood of a break fee while on the AIB green fixed rate (or any other break fee for that matter) becomes even less likely, ?
 
@Rasputin, Yes that is my understanding and others on AAM agree.

While the wholesale rates were stable or dropping, you could benefit from the quirk of AIB's second method of calculating the ERC using the actual customer rates.

Now that it looks likely that wholesale rates will rise, you will benefit from the usual calculation resulting in a zero ERC. But I'd always recommend getting it checked first to avoid any surprises

If you have a look at some of the posts earlier this week on the thread below, you'll see that I restarted my 5 year fixed rate with AIB at no cost so if you are already with them, you should consider doing it also.

Overpayment flexibility of AIB's 5yr Fixed Rate

We are in the process of switching and are looking at 3,4,5 year fixed rates. KBC, Avant, AIB and UB all have rates between 1.95-2.35% and when broker fees (a number of Avant brokers seem to charge a fee) and cashback (UB €1.5k, KBC €3k, AIB 2k) are accounted for, they are all very similar...
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