By default they reduce the amount, so if you ignored the letter it's a reduced amount.What happens if you do nothing with the letter that they send out and just keep overpaying? I'm in middle of switching to AIB from EBS and want to make regular monthly overpayments. I dont want to shorter the term, so can I just ignore their letter?
e.g. if our mortgage is E1500,set up by direct debit, and I set up a separate overpayment direct debit of E200 per month. What happens on month 2? Will they still take E1500 as the before, and my E200 will also go out? How does the monthly repayment reduce then, or instead of taking E1500 will they take E1498 (for example)?
Hi,
This applies to AIB only, as EBS sit on a different Mortgage platform.
I do this anytime I've a little best egg saved up. If it's a variable rate loan there are no limits to early repayments.
Firstly, I had to phone them up to get the Mortgage available on my internet banking.
Once I had that, I can just use the 'transfer between my accounts' option.
I transfer from current account to Mortgage, and that's it. It might take a day to appear on mortgage account, but you get the correct value date for it.
The default setting on AIB is that they recalculate your monthly repayment amount, and keep the term the same.
I'm not sure if they've any additional logic for small repayments.
Every time you make an overpayment, they send you a letter within a few days outlining you need repayment amount.
If you want to keep the repayment amount, and adjust the term, you need to send them a written letter as you're making an irrevocable change to your contract. It needs both signatures if jointly held. This is for each repayment. What I've done in the past is made a few repayments, and then just sent a single letter asking them to reduce the term by 1 year for example.
I overpay my AIB SVR mortgage every month via Internet Banking. The default position is that the monthly repayment amount is reduced due to the overpayment - no letter required. As per RedOnion I receive a letter for every extra transfer stating what my new repayment will be. Once your account is added to Internet Banking you can transfer money between the accounts.
Example: My repayment is €1000 and I put in €200 extra via online Banking. My next repayment is €998 so I transfer in €202, next month €204 etc. In reality I tend to round up and would put in €210 for example instead of €202 further reducing repayment etc. I am hoping this will have a large effect! No standing order but I am logging into Internet Banking anyway and it takes 2 minutes.
I overpay my AIB SVR mortgage every month via Internet Banking. The default position is that the monthly repayment amount is reduced due to the overpayment - no letter required. As per RedOnion I receive a letter for every extra transfer stating what my new repayment will be. Once your account is added to Internet Banking you can transfer money between the accounts.
Example: My repayment is €1000 and I put in €200 extra via online Banking. My next repayment is €998 so I transfer in €202, next month €204 etc. In reality I tend to round up and would put in €210 for example instead of €202 further reducing repayment etc. I am hoping this will have a large effect! No standing order but I am logging into Internet Banking anyway and it takes 2 minutes.
I have overpaid a couple of times recently and haven't received any letter. I use the Internet banking to pay off odd amounts to make it look like mortgage is reducing quite quickly when it actually isn't really. It reduces my monthly repayments but I think I may contact them in the new year re reducing the length which will actually save more in long term. Awaiting tracker redress.
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