Paying off a mortgage early

dlambirl

Hi

Ok, so my friend took out a mortgage with Permanent TSB about 5-6 years ago. He has since sold some of his assets and wishes to pay off some if not all of his mortgage. How does he go about this? Will there be a levy/fine for paying it off early and if so how much approx?

Thanks again

PhilipMarlowe

As long as it's not a fixed rate loan, there should be no penalty. Go into the PTSB branch with a cheque is all... it may be possible to do a transfer online too... Call them and see.

dlambirl

No its not a fixed rate, a variable rate over 30 years i think

PhilipMarlowe

I have paid off a lump sum off my tracker mortgage with PTSB by simply going into my local branch with my account details and a cheque. There isn't anything complicated about it unless the rate is fixed. I don't know what the penalties would be in the case of a fixed rate...
In your case, you can find out the balance outstanding which I assume is calculated daily... pay off the lump sum and let them know if you want the term reduced or the monthly payments reduced... in other words, pay less than you had being paying every month for the remainder of the mortgage or else continue with the same monthly payments as usual and pay the mortgage off earlier.
You can probably specify a monthly amount that you want to pay too which may fall somewhere in the middle of the above two possibilities.
Of course, you could clear the loan in full if you have enough of a lump sum.

I remember seeing an online calculator that demonstrated the savings to be made from paying off the loan early or over-paying monthly etc... do a search.

Depends on your circumstances really... if you have other needs for the cash, consider not putting it all against the mortgage because it may prove difficult to raise cash somewhere down the line... this you may need advice with.

BendiBus

Licksy wrote: »

Depends on your circumstances really... if you have other needs for the cash, consider not putting it all against the mortgage because it may prove difficult to raise cash somewhere down the line... this you may need advice with.

In a scenario where someone is considering paying an additional amount each month, it might be worth considering paying it into a high interest regular saver a/c instead. Depending of course on the mortgage interest rate, some high interest accounts pay more than would be saved by overpayments into a mortgage even after taking DIRT into account. Also to be considered is mortgage interest relief.

The other advantage to this is that you still have access to your cash.

dlambirl

Thanks a million guys.

I'll tell him to ring PTSB and find out his balance outstanding and then go in and try and pay it off. Hopefully it'l be straight forward for him.