paying lump of mortgage

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bobo

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has anyone had problems doing this with aib? I am looking to take 27k off mortgage principal and get them to confirm reduced term (check with karl jeacles calculator - it will knock 5 yrs off term), however, i have heard of people having problems with other banks ignoring there specific wishes and reducing the monthly repayments deliberately and keeping the same term!! This sounds too fustrating to me. What is the best way to go about this? Should I write a detailed letter outlining my requirements and enclose a cheque? I'm not sure that aib have a walk in mortgage counter in ballsbridge.? Alternatively, can i go to my own aib bank even though my mortgage is with aib finance and leasing (i.e. via a broker)?
Any tips or pitfalls to beware of are welcomed.
 
I used to have trouble getting AIB to do what I wanted until I used the right terminology with them. It seemed like they were mis-interpreting the instructions in a way that minimised their loss.

Send them a crossed cheque made payable to "AIB mortgage account of bobo". Tell them in writing it is an out of course lodgement in permanent reduction of the principal of your mortgage and to keep your future repayments at the existing level until further notice, subject to interest rate fluctuations, so that the term is reduced. Keep the letter concise and temperate.

You could use KJ's mortgage calculator to tell them the approximate final repayment date you're expecting.

They should acknowledge within about a week with details of the outstanding principal and new final repayment date. If they do misinterpret your instructions write straight back to them and get them to correct it.

I always dealt directly with the AIB mortgage centre in Hume House as I arranged my mortgage over the phone instead of through a branch.
 
Worth noting that if you are currently on a fixed rate you may incur a penalty for doing this. Its worth checking this before proceeding to ensure you get max. benefit from your lumpsum.
 
Also if the lump sum repayment changes your LTV to a ratio qualifying for a lower tracker rate tell them you want that rate (assuming you're not on a fixed rate as mentioned by PM1234).

It would be better to do that in a separate letter as having more than one instruction per letter reduces the probability they'll do what you want.
 
GeneralZod said:
Also if the lump sum repayment changes your LTV to a ratio qualifying for a lower tracker rate tell them you want that rate (assuming you're not on a fixed rate as mentioned by PM1234).

It would be better to do that in a separate letter as having more than one instruction per letter reduces the probability they'll do what you want.
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thanks for the tips. i am on a tracker intro rate of 0.6% over ecb for first yr. do you know if you can visit aib hume house and get this processed over the counter? or is it just best to put everything in writing and send it registered post?
 
They didn't have a public counter when I was dealing with them. I visited the place once when delivering mortgage application supporting documents to them. They wanted all instructions in writing anyway. I never bothered to send it registered post. You could drop the letter in by hand if you want to eliminate the An Post delay. I made lots of prepayments.
 
My mortgage is with ICS. In general, if you make a lump payment directly into the account, do banks take the monthly repayment or term down?
 
You need to tell them what you want to do - ideally in writing. For example tell them that you want to pay the specified sum of the capital outstanding and then keep your mortgage repayments at their "normal" level. Reducing the effective term and keeping the repayments at their normal level will yield the best savings if you can afford to do this.
 
Priory said:
My mortgage is with ICS. In general, if you make a lump payment directly into the account, do banks take the monthly repayment or term down?
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In general they'll take the monthly repayment down if you don't say you want the term reduced.

The bank reduces their loss of interest this way.
 
ICS/BOI policy is to reduce the repayments unless otherwise instructed due to complaints from customers who made lump sum repayments and got a shock when their usual DD came through.
 
you cant go into Hume House & directly lodge funds to your mortgage. A well worded letter should ensure they carry out your instructions- ring them for confirmation once you have sent it in.
 
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