Hi all I recently have overpaid my BOI SVR mortgage by 200euro each month and hope to continue to do this monthly. I Wanted the term to remain the same and the monthly repayment to be recalculated. So on the first month I did the transfer by banking 365 to my mortgage account of 200 euro and rang BOI mortgages to advise I wanted the monthly repayments to reduce and term remain the same. I also advised that I wanted to make regular monthly overpayments of same amount and them to be treated in same way. However after second months overpayment nothing happened. Rang BOI mortgages who initially tried to convince me that the adjusted figure for the first overpayment reflected the second overpayment which it didn't and then they advised me that I would need to ring every month to advise them of that months overpayment and request them to reduce the monthly repayment figure. When I asked if I could send in a letter to BOI mortgages instructing them of above and that the payments would be regular , the advisor said the letter wouldn't suffice and I would need to ring every month!!! This seems ludicrous and onerous and a big obstacle in my view to making regular overpayments. Is this usual practice? Has anybody had same experience or any advice?
Overpayments SVR Mortgage BOI
- Thread starter pumba
- Start date
Brendan Burgess
Founder
- Messages
- 52,181
Let's be clear about what you want here.
You have a mortgage of €200k with 20 years remaining which results in a repayment of €1,100 a month.
You want the term to remain the same, but you want to overpay by €200 a month. That seems very complicated to me.
If you paid off a lump sum of €30k, I could see how BoI would either reduce the term or reduce the repayment. But they can't be expected to do that for you every month for €200.
You could just continue to pay the extra €200. They will credit it as an overpayment and not reduce the term or the repayment unless you ask them.
Brendan
You have a mortgage of €200k with 20 years remaining which results in a repayment of €1,100 a month.
You want the term to remain the same, but you want to overpay by €200 a month. That seems very complicated to me.
If you paid off a lump sum of €30k, I could see how BoI would either reduce the term or reduce the repayment. But they can't be expected to do that for you every month for €200.
You could just continue to pay the extra €200. They will credit it as an overpayment and not reduce the term or the repayment unless you ask them.
Brendan
Ok sorry Brendan just trying to get my head around the last thing you said which is I could continue paying the 200 euro each month and they will credit it as an overpayment but will not reduce the term or the overpayment unless I ask them to? So how do they credit the overpayments if they don't reduce the term or the repayments? My question which got lost in all the detail is if I want to make regular monthly small overpayments on a variable mortgage and I want the term of the mortgage to remain the same is it the case the only way to achieve this is to pick up the phone every month after making the overpayment and contact BOI and advise them I want the term to remain the same. If I don't do this how will the mortgage account be credited with the overpayments. Is there a default mode? Unfortunately I'm not in a position to make a lump sum payment but can make regular small overpayments.
Another contributor on this forum mentioned doing exactly this with AIB and what he did was send a letter at the beginning to AIB advising them that he intended making monthly overpayments on his variable rate mortgage and he wishes the term to remain the same. He did not need to contact them after that and just overpaid each month and term remained the same( as a result of this his monthly repayments dropped each month as he overpaid).
Another contributor on this forum mentioned doing exactly this with AIB and what he did was send a letter at the beginning to AIB advising them that he intended making monthly overpayments on his variable rate mortgage and he wishes the term to remain the same. He did not need to contact them after that and just overpaid each month and term remained the same( as a result of this his monthly repayments dropped each month as he overpaid).
I have a recently returned tracker mortgage with BOI. There is no problem making regular overpayments with variable or tracker mortgages. I have decided to keep my mortgage payments as they were prior to getting the tracker back so I will clear the mortgage more quickly. The term remains the same. I just sent them a letter stating that I wished to overpay my mortgage by regular amount every month and told them what the new repayment amount would be. If you on to the BOI website there is information there about how to overpay. You can also register your mortgage account so that you can see the amount owed reducing every month. You can also transfer money into the mortgage at any stage (for example if you are lucky enough to have a surplus in your current acccount at month end you can transfer that).
Brendan Burgess
Founder
- Messages
- 52,181
Threadser, why are you overpaying a tracker mortgage? It makes very little sense. If you want to trade up at any time in the future, you will have a much lower tracker mortgage to bring with you.
If you want to tease this out further, start a fresh thread.
Brendan
If you want to tease this out further, start a fresh thread.
Brendan
I was with KBC last year. Any overpayments immediately (within a month) affected my monthly direct debit.
Now I'm with Ulster Bank. When I overpay it doesn't affect how much I pay each month. But on their online banking I can see these repayments affecting the interest due as in I'm paying less interest but paying the same monthly so I'm paying more capital off.
And each extra repayment obviously affects the capital so while they don't inform me that the term is reducing I can do the sums myself. They're a bit random though. I did a largish repayment a couple of months ago and they sent a letter to say that my monthly repayments were being reduced because of it. It doesn't bother me too much. When the mortgage gets small enough I can decide what to do with it even if there are loads of years left on it.
Now I'm with Ulster Bank. When I overpay it doesn't affect how much I pay each month. But on their online banking I can see these repayments affecting the interest due as in I'm paying less interest but paying the same monthly so I'm paying more capital off.
And each extra repayment obviously affects the capital so while they don't inform me that the term is reducing I can do the sums myself. They're a bit random though. I did a largish repayment a couple of months ago and they sent a letter to say that my monthly repayments were being reduced because of it. It doesn't bother me too much. When the mortgage gets small enough I can decide what to do with it even if there are loads of years left on it.