ThanksSorry, I'm struggling to read your post the way it's formatted.
Everytime you make an overpayment, or change interest rates, AIB will recalculate your repayment amount based on current valance and remaining contractual term.
At the dnd of the fixed, they'll change rare and calculate a new repayment.
So, if at the end of your fixed rate you just pay the contractual repayment, then the term won't reduce. You will need to keep overpaying, or alternatively get the term reduced to suit you.
With AIB you cannot contractually reduce the term during a fixed interest rate without losing the onterest rate - they treat it as a break.
I wont have it paid off by 2051 and i cant afford to overpay for for the next 25+ years and i retire in 2050Why do you want to explicitly rather than effectively reduce the term?
Why not just leave it as it is even if you are making accelerated repayments?
If only because should you hit financial trouble in the future it leaves you with some breathing room.
Sorry, I don't understand.I wont have it paid off by 2051 and i cant afford to overpay for for the next 25+ years and i retire in 2050
@RedOnionJust phone AIB and ask them to do it, and they'll send a form. Or alternatively they will send you a letter when you make an overpayment.
Because changing term is an amendment to the contract, I believe they need it in writing and signed.
It's very straightforward to do.
I think you are mistaken Re if your overpaying you're reducing the effective term.Sorry, I don't understand.
If you're overpaying at all then you're reducing the effective term.
What is your rationale for officially reducing the term with your lender rather than just leaving things be (i.e. the effective term is reduced but officially you're still on the original term)?
They won;t write to you if you overpay a fiver. I'm not sure the amount that triggers it, but any large overpayment you'll get a letter.Will they write to you every time you make an overpayment ?
And must you complete an overpayment application form every time you make an overpayment ?
Transfer via aib account directly into mortgage account no from neede, i dont give instructions, letter comes about 2 weeks later saying new repayment amount is now x amount. End term is still same.@RedOnion
Will they write to you every time you make an overpayment ?
And must you complete an overpayment application form every time you make an overpayment ?
I'm not.I think you are mistaken Re if your overpaying you're reducing the effective term.
You are absolutely correct of course.If my repayment is €1040 and the interest rate stays the same throughout the term, i make no further overpayments
The term will not be reduced, i will be paying €1040 all the way upto 2051.
is that wrong or right what am i missing
Here's one:I'm not.
If you make accelerated repayments you are reducing the effective term of the mortgage.
It's simple maths.
Accelerated repayments mean that you are paying down the capital balance faster than if you are making just the scheduled repayments.
That means that the capital will be cleared faster than scheduled.
(I'm assuming that any additional amount over the scheduled repayment is being paid off the capital balance - some lenders may do this automatically, some may need to be told explicitly).
Any simple mortgage amortisation calculator will show you this.
You are right about this. The letter you receive has the new calculations for the remaining term and remaining balance, which has been reduced by your overpayment. The new calculation states your new monthly repayment amount based on the above. The term hasn't reduced but the monthly payment has.I think you are mistaken Re if your overpaying you're reducing the effective term.
My reasoning.
It was €1077, end of mortgage is 2051.
Made loads of overpayments now monthly contractual amount is €1040, term is still the same 2051 end of mortgage.
If my repayment is €1040 and the interest rate stays the same throughout the term, i make no further overpayments
The term will not be reduced, i will be paying €1040 all the way upto 2051.
is that wrong or right what am i missing.
Thanks
@New2024Transfer via aib account directly into mortgage account no from neede, i dont give instructions, letter comes about 2 weeks later saying new repayment amount is now x amount. End term is still same.
Yes that's is accurate.@New2024
So if mortgage account is linked with your normal AIB current account you just transfer over any amount to the mortgage account?
If over a certain limit you get a letter and if smaller amount you don’t get a letter.
You don’t give AIB instructions to reduce term or monthly repayment,they just take off over payment from the mortgage balance is that correct ?
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