Overpayment Flexibility Confusion


Registered User
Hi there, often banks boast about their overpayment features but the wording on them can be very unclear.

For example, ICS state "customers can pay an additional 20% off their fixed rate mortgage without penalty in any 12-month period". Does this (a) mean 20% of the mortgage capital balance or (b) just 20% of the monthly repayment?

For example on a €200,000 mortgage, option (a) would mean an overpayment allowance of up to €40,000 on year one vs a few hundred euro per month with option (b).

if anyone is familiar with this and can provide clarity that would be appreciated as there is a huge difference between the two scenarios.

Brendan Burgess

It is A.

A mortgage means the amount of money which a person owes. So their mortgage is €400,000.

Many people mistakenly refer to "their mortgage" as the amount they pay each month. When I ask people "how much is your mortgage?" , I would say that half reply "€1,200" - meaning their mortgage payment.

So now I ask "how much is outstanding on your mortgage ?" or "what is your mortgage balance?" but even still I would often be told "€1,200" , as that is the only figure most people know.

ICS should reword the above to
"customers can pay an additional 20% off the balance outstanding on their fixed rate mortgage without penalty"