By asking for it to be reflected in the 'lump sum', you mean for it to be paid off the capital?
For the last 2.5 years I reluctantly had to visit an AIB branch each time I wanted to overpay on our mortgage. That was until last December 2014, when I accidently transferred money from my savings account into our mortgage account online (until this date I never had the facility to complete this transaction). We received the usual acknowledgment letter with the sum overpayed and the small change in our monthly repayments a few weeks later from AIB. I assumed it is the same for everyone. Prior to this change, I never filled out a form, never contacted AIB, just transferred the money in the branch and moaned how annoying this was. At the start, AIB told me basically to only contact them if I wanted to change the mortgage term, if I did not contact AIB then it was assumed you wanted to reduce your montly repayments.
That makes sense although, reducing your payments instead of the term means you are not saving as much on interest payments?
I have 225k left on my mortgage, paying SVR with AIB at the moment. If I make a lump sum payment of say 25k, I will save approx. 27k in interest if I choose to reduce the term. If I chose to reduce the repayments instead, I'll save approx. 11k in interest.
I'm basing this off Karl Jeacle's mortgage calculator and am assuming I am using it correctly!
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