Mortgage transfer to AIB

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villacoyle

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Hi, I received a statement from Ulster Bank dated up to July 21st 2023 showing my mortgage balance which I believe was then to become the opening balance with AIB. That transfer was completed on July 24th. Normally UB added monthly interest at the end of each month. Does anyone know if interest would have been added at the end of July even though they left the market on July 21st? Also AIB add their interest at the start of each month, so the balance at August 1st would then have interest applied on August 1st for the month ahead based on that August 1st balance. If their rule is to apply interest on the first day of the month would they have applied any interest for the period between July 24 and July 31st?
I am raising this query as I have contacted them for my current mortgage balance. It is I believe €300 higher than it should be. I have asked them what their opening balance from UB was and almost unbelievable they have told me they can't see the opening balance! That should be a basic bit of information that is there to be seen. How else could they have calculated interest on August 1st if they can't see the opening balance from 7 days earlier.. grateful for any information on this.
 
villacoyle said:
the balance at August 1st would then have interest applied on August 1st for the month ahead based on that August 1st balance.
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No lender capitalises interest in advance.

Just ask AIB for a statement, and work it out from there. The customer service agents do not have unlimited access to systems, so don't be surprised if they don't have access to a specific data point.
 
RedOnion said:
No lender capitalises interest in advance.

Just ask AIB for a statement, and work it out from there. The customer service agents do not have unlimited access to systems, so don't be surprised if they don't have access to a specific data point.
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Thank you RedOnion
 
This is what should have happened and probably did.

1) On 24th July all interest due on the mortgage was added to the balance and this was Ulster Bank's closing balance
2) This was also AIB's opening balance
3) AIB calculated interest every day
4) On some specific day towards the end of the month, they add the interest to the balance.

So get a closing statement from Ulster Bank.
Get an opening balance from AIB and see if the two match.
Then check towards the end of August when they should add the interest.

It's possible that AIB added some interest on say 28th August, but it would have been only 7 days' interest.

Brendan
 
AIB calculate interest on the 1st of every month for the coming month. If you then make a repayment during the month they will pass an interest adjustment to reflect the overpayment as your monthly payment reduced the balance at some stage during the month.

As said above, worth requesting statement from AIB. They should be able to show full history. Legal title on the loans changed but its not like these mortgages have a start date of 24th July 2023 on AIB systems. They will still have full repayment/balance history.

AIB have made a real mess of this transfer. Not hearing of many problems in PTSB.
 
RedOnion said:
Really? I thought they were on legacy products and had stopped years ago.
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As far as I know still standard for some reason and I think it is one of the reasons that they are having such problems. I am still not sure how AIB catered for this. Last I saw was they would refund any difference in interest paid due to the difference in how they charge the interest to the mortgage account compared to Ulster but that would be at redemption. I haven't detailed explanations from AIB to explain the issue.
 
Sunny said:
AIB calculate interest on the 1st of every month for the coming month. If you then make a repayment during the month they will pass an interest adjustment to reflect the overpayment as your monthly payment reduced the balance at some stage during the month.
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Where are you getting that from?

Do you have a very, very old mortgage?

I looked at my mortgage and they add the interest to the mortgage around the middle of the month. I assumed that they calculated it on the daily balance and added it once a month.

I never saw an interest adjustment on my account, but I never made a repayment outside the monthly repayment due.

Brendan
 
Brendan Burgess said:
Where are you getting that from?

Do you have a very, very old mortgage?

I looked at my mortgage and they add the interest to the mortgage around the middle of the month. I assumed that they calculated it on the daily balance and added it once a month.

I never saw an interest adjustment on my account, but I never made a repayment outside the monthly repayment due.

Brendan
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I used to have a tracker with them and that's how it worked. It's also confirmed on the information hub for transferred mortgages. They do calculate it daily but it is added in advance. Maybe its just for tracker mortgages for some reason?

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Sunny said:
I used to have a tracker with them and that's how it worked. It's also confirmed on the information hub for transferred mortgages. They do calculate it daily but it is added in advance. Maybe its just for tracker mortgages for some reason?

aib.ie

Welcome To AIB Information Hub

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I stand corrected. It's very unusual in Ireland for systems to still do this, and the wording on the AIB hub is not very reassuring for anyone digging into it:

"Is there a difference in how interest is calculated?
  • Your mortgage repayment amount will carry over to us. The way in which interest is charged to your mortgage loan account will operate differently to Ulster Bank. This is expected to have a small impact on the amount of interest you pay over the life of the loan however if this is the case AIB will refund the difference at redemption of your mortgage."
 
RedOnion said:
I stand corrected. It's very unusual in Ireland for systems to still do this, and the wording on the AIB hub is not very reassuring for anyone digging into it:

"Is there a difference in how interest is calculated?
  • Your mortgage repayment amount will carry over to us. The way in which interest is charged to your mortgage loan account will operate differently to Ulster Bank. This is expected to have a small impact on the amount of interest you pay over the life of the loan however if this is the case AIB will refund the difference at redemption of your mortgage."
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I agree. Presume that's why PTSB haven't had the same number of issues with their mortgages. I think the whole process has been mis-managed by AIB. Even the above statement is not appropriate. Give a proper explanation about how the interest being charged to the account will be different to Ulster. It's like they think people are too stupid to understand and that we all just need to trust them that it will all work out ok in the end.

I work for a Bank and I hear day in and day out about how all that matters is the customer and customer outcomes/experience. How we all have to do the right thing. And yet, they still come out with vague explanations like the above. Same with the issue a few weeks ago. No proper explanation about why people got letters telling them that their repayments were going up more than expected. AIB brushed it off as some one time system issue. Didn't buy it then and don't buy it now. They obviously have issues with taking on these mortgages because of the way their system works. I am sure they will iron them out but they need to be clear with people.
 
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