Trouble with making overpayments on mortgage

Diemos

I am looking to move our mortgage, load of folks here have spoken about over payments and make it sound easy.
We have tried once and it was a nightmare, it took 5 months to get things cleared up.
We can only make payments by bank draft and have to send in a written note stating if we would like the payment to be put towards credit, to take off the princial and reduce the monthly repayments or take off the princial and reduce the term.

Can anyone give me some advice on a mortgage provider to move to, thinking of locking in on 5 to 10 years fixed?

L1011

Fixed and overpayments do not go together well, that is going to be a major issue here

amcalester

I'm on a Fixed with BOI and rang them today to set up a monthly over payment. They just increased the Direct Debit from December with the over payment being put towards reducing the term.

If I want to reduce back to my fixed amount I just need to ring up and ask them to do that.

I was surprised at how easy it was. Only (potential) issue is that the over payments are limited to 10% of the monthly payment.

TheChizler

Diemos wrote: »

Can anyone give me some advice on a mortgage provider to move to, thinking of locking in on 5 to 10 years fixed?

Is it possible to split it between fixed and variable, and make the overpayments towards the variable portion?

Diemos

L1011 wrote: »

Fixed and overpayments do not go together well, that is going to be a major issue here.

I'm not completely sold on fixed, I'm just leaning that way.

I can only see interest rates go up from here.

Sausage dog

KBC do split mortgages....some at a fixed rate & some at a variable rate. They also allow overpayment.

pwurple

What bank are you with?

KBC do a 'sweeper', we used that to overpay. We set it up on our online banking, it "swept" any remaining balance in our current account into the mortgage account on a set day each month. (day before we got paid for example).

AIB, I just transfer in the amount online, I can see both accounts there visible. Simple online bank transfer from one account to the other.

BOI, it is a phonecall, can't do it online.

Diemos

I am with Haven.
It's been a nightmare.

So with say KBC take your payment online, does your term drop automatically or does the repayment amount drop?

mirrorwall14

We’re with haven and overpaying by a third monthly by DD. However we aren’t fixed

sunnyday1234

Its so easy with AIB as another poster said. I can see my mortgage account online just like my current account. To overpay all i do is move money from current to mortgage online and i get a letter in the post with my new repayment ammount

I love getting that letter in the post a few weeks later

pwurple

Diemos wrote: »

I am with Haven.
It's been a nightmare.

So with say KBC take your payment online, does your term drop automatically or does the repayment amount drop?

You set up in advance what way you want it to work. We asked for term decrease.

micks_address

pwurple wrote: »

What bank are you with?

KBC do a 'sweeper', we used that to overpay. We set it up on our online banking, it "swept" any remaining balance in our current account into the mortgage account on a set day each month. (day before we got paid for example).

AIB, I just transfer in the amount online, I can see both accounts there visible. Simple online bank transfer from one account to the other.

BOI, it is a phonecall, can't do it online.

When you transfer online to AIB - does anything automatically change in relation to your monthly payment? If you put a lump sum in would the monthly payment reduce?

cruizer101

L1011 wrote: »

Fixed and overpayments do not go together well, that is going to be a major issue here

Why do you say that? Certain banks are a bit trickier to do it with but I wouldn't say is major issue.

Different banks allow different amounts of overpayment, I'm with ulster and they allow 10% of outstanding to be overpaid per year so that is plenty.
To overpay you just get an IBAN and reference number and transfer is the same as any other transfer.

L1011

cruizer101 wrote: »

Why do you say that? Certain banks are a bit trickier to do it with but I wouldn't say is major issue.

Different banks allow different amounts of overpayment, I'm with ulster and they allow 10% of outstanding to be overpaid per year so that is plenty.
To overpay you just get an IBAN and reference number and transfer is the same as any other transfer.

If its allowed at all, its limited and most lenders make it as difficult as possible to do so. Its not quite as bad as it was in the past but if you want to overpay you'll find it much easier on SVR.

fletch

micks_address wrote: »

When you transfer online to AIB - does anything automatically change in relation to your monthly payment? If you put a lump sum in would the monthly payment reduce?

Yes although you can send them a letter (by email) if you wish it to reduce the term.

Diemos

mirrorwall14 wrote: »

We’re with haven and overpaying by a third monthly by DD. However we aren’t fixed

And is your principal being reduced?
We've been told that we have to send in a letter stating our intent with every payment.
Even then when we sent in a letter, "there was no action put against the letter" and the cash just sat in our account as credit.

mirrorwall14

That must be because you are fixed. Ours is coming off the principal, we had a letter issued telling us the new term if we keep it up and I just rang to double check there. We sent a straightforward letter stating the amount of the overpayment and a request that it come off the principal

averagejoe123

Diemos wrote: »

I am looking to move our mortgage, load of folks here have spoken about over payments and make it sound easy.
We have tried once and it was a nightmare, it took 5 months to get things cleared up.
We can only make payments by bank draft and have to send in a written note stating if we would like the payment to be put towards credit, to take off the princial and reduce the monthly repayments or take off the princial and reduce the term.

Can anyone give me some advice on a mortgage provider to move to, thinking of locking in on 5 to 10 years fixed?

Ulster Bank are probably your best bet for what you are looking to achieve here. You can get 2.6% fixed for 4 years. They also allow you to overpay by 10% of the amount borrowed each year.

There are merits for and against lowering your monthly payment v's reducing the term. I personally think you would be mad not to reduce your monthly repayment because if you run into difficulty down the line you will have a small mortgage. If you reduce the term this is irreversible without renegotiating your mortgage terms which will be difficult if your financial circumstances have changed. Also, if you continue to make the regular overpayments on a monthly basis you will be reducing the term, keeping the flexibility and paying the same amount of interest.

mirrorwall14

averagejoe123 wrote: »

Ulster Bank are probably your best bet for what you are looking to achieve here. You can get 2.6% fixed for 4 years. They also allow you to overpay by 10% of the amount borrowed each year.

There are merits for and against lowering your monthly payment v's reducing the term. I personally thing you would be mad not to reduce your monthly repayment because if you run into difficulty down the line you will have a small mortgage. If you reduce the term this is irreversible without renegotiating your mortgage terms which will be difficult if your financial circumstances have changed. Also, if you continue to make the regular overpayments on a monthly basis you will be reducing the term, keeping the flexibility and paying the same amount of interest.

Can I ask a question here? We are currently over paying by a third. It’s coming off the principle and is reducing the term.

What do you mean by the above? Is there a different option to what we are doing? We have two kids, the mortgage is reasonable but only have life insurance on one of us so we want to make sure to use the over payment in the best possible way just in case. In a few years time it would be possible for one of us to repay the mortgage on our own if it came down to it but not right now with childcare costs

averagejoe123

mirrorwall14 wrote: »

Can I ask a question here? We are currently over paying by a third. It’s coming off the principle and is reducing the term.

What do you mean by the above? Is there a different option to what we are doing? We have two kids, the mortgage is reasonable but only have life insurance on one of us so we want to make sure to use the over payment in the best possible way just in case. In a few years time it would be possible for one of us to repay the mortgage on our own if it came down to it but not right now with childcare costs

What I mean by the above is the following.

Say you have a mortgage of €300k over 30 years. Your repayments will be roughly €1,200 a month.

Immediately after taking out the mortgage you win €100k on the lotto which you decide to put off the mortgage. You will be asked if you want to reduce the term and keep the payments the same or reduce the payments and keep the term the same.

Option A- If you reduce the term you will still be paying €1,200 a month but your new term is roughly 17 years.

Option B- If you decide to reduce the repayment it will now be €800 over 30 years. What I recommend is to overpay by €400 a month to bring it up to the same level as the original mortgage. This will reduce the term down to about 17 years too.

With Option A you are committing yourself to repaying the €1,200 for the remainder of the term. You will find it very difficult to switch to option B if you hit financial trouble.

With option B you have the flexibility to overpay as much or as little as you like on a monthly basis. Say you decide to have a 3rd child or one of you loses your job. Having the smaller monthly repayments offers better peace of mind.

You would be better off asking your bank to allocate the overpayments off the capital and not the term. It will vary by bank by bank as to how easy/difficult this is. I am with AIB and it couldn't be easier.

Have a mess around with the figures on here https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator#results

Diemos

mirrorwall14 wrote: »

That must be because you are fixed. Ours is coming off the principal, we had a letter issued telling us the new term if we keep it up and I just rang to double check there. We sent a straightforward letter stating the amount of the overpayment and a request that it come off the principal

Lucky you, we are variable also but our experience was nothing like that.

TheChizler

averagejoe123 wrote: »

Option A- If you reduce the term you will still be paying €1,200 a month but your new term is roughly 17 years.

Option B- If you decide to reduce the repayment it will now be €800 over 30 years. What I recommend is to overpay by €400 a month to bring it up to the same level as the original mortgage. This will reduce the term down to about 17 years too.

Sorry, I used to be more familiar with this but we put off buying for a while so I've forgotten it all .

Going to play around with the calculator but both options should have the same total cost over the lifetime (whatever it ends up being) of the mortgage right? Just B gives you more flexibility.

Edit: I don't think I can test this in this particular calculator.

averagejoe123

TheChizler wrote: »

Sorry, I used to be more familiar with this but we put off buying for a while so I've forgotten it all .

Going to play around with the calculator but both options should have the same total cost over the lifetime (whatever it ends up being) of the mortgage right? Just B gives you more flexibility.

Edit: I don't think I can test this in this particular calculator.

Yes the mortgage terms and interest paid will be roughly the same.

This will also be the case if you do not have the initial lump sum to take off. If you over pay the capital amount outstanding rather than reducing the term on a monthly basis all things being similar, the term and interest paid should be very close.

Who is your mortgage currently with and what rate are you paying? The mortgage market is very competitive at the moment so people should be monitoring their rates as they would with any other utility bill. Between cashback offers and rate reductions there can be huge savings.

TheChizler

averagejoe123 wrote: »

Yes the mortgage terms and interest paid will be roughly the same.

This will also be the case if you do not have the initial lump sum to take off. If you over pay the capital amount outstanding rather than reducing the term on a monthly basis all things being similar, the term and interest paid should be very close.

Who is your mortgage currently with and what rate are you paying? The mortgage market is very competitive at the moment so people should be monitoring their rates as they would with any other utility bill. Between cashback offers and rate reductions there can be huge savings.

Thanks for the info! Don't have one yet but had several pre-application reviews and I've been sure to ask them all what their terms on overpayment are. Talked to Ulster Bank, Permanent TSB, AIB, KBC so far. AIB and KBC seemed the most flexible, the lady in Permanent TSB looked at me funny when I asked about overpaying...

Edit: Just realized your question possibly wasn't directed at me! :pac:

sunnyday1234

averagejoe123 wrote: »

Diemos wrote: »

I am looking to move our mortgage, load of folks here have spoken about over payments and make it sound easy.
We have tried once and it was a nightmare, it took 5 months to get things cleared up.
We can only make payments by bank draft and have to send in a written note stating if we would like the payment to be put towards credit, to take off the princial and reduce the monthly repayments or take off the princial and reduce the term.

Can anyone give me some advice on a mortgage provider to move to, thinking of locking in on 5 to 10 years fixed?

Ulster Bank are probably your best bet for what you are looking to achieve here. You can get 2.6% fixed for 4 years. They also allow you to overpay by 10% of the amount borrowed each year.

There are merits for and against lowering your monthly payment v's reducing the term. I personally think you would be mad not to reduce your monthly repayment because if you run into difficulty down the line you will have a small mortgage. If you reduce the term this is irreversible without renegotiating your mortgage terms which will be difficult if your financial circumstances have changed. Also, if you continue to make the regular overpayments on a monthly basis you will be reducing the term, keeping the flexibility and paying the same amount of interest.

exactly

mirrorwall14

averagejoe123 wrote: »

What I mean by the above is the following.

Say you have a mortgage of €300k over 30 years. Your repayments will be roughly €1,200 a month.

Immediately after taking out the mortgage you win €100k on the lotto which you decide to put off the mortgage. You will be asked if you want to reduce the term and keep the payments the same or reduce the payments and keep the term the same.

Option A- If you reduce the term you will still be paying €1,200 a month but your new term is roughly 17 years.

Option B- If you decide to reduce the repayment it will now be €800 over 30 years. What I recommend is to overpay by €400 a month to bring it up to the same level as the original mortgage. This will reduce the term down to about 17 years too.

With Option A you are committing yourself to repaying the €1,200 for the remainder of the term. You will find it very difficult to switch to option B if you hit financial trouble.

With option B you have the flexibility to overpay as much or as little as you like on a monthly basis. Say you decide to have a 3rd child or one of you loses your job. Having the smaller monthly repayments offers better peace of mind.

You would be better off asking your bank to allocate the overpayments off the capital and not the term. It will vary by bank by bank as to how easy/difficult this is. I am with AIB and it couldn't be easier.

Have a mess around with the figures on here https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator#results

Thanks. We don’t have a lump sum, just the ability to overpay out of salary monthly. I assumed we were on option B but having gone back to Haven she didn’t have a clue what was going on. We never wanted or requested that the term be officially reduced, just asked for the overpayment to be paid off the principle Apparently now we’ll get a letter. Feck it

mirrorwall14

Diemos wrote: »

Lucky you, we are variable also but our experience was nothing like that.

Well we had to write a personal statement as to how we would pay off the mortgage in the event of something happening the uninsured partner, we included that we planned to over pay the mortgage so it would be wierd if they didn’t allow it.

However as I just replied there, they seem to be very confused as to what’s happening without our mortgage when we rang today. Just have to see what happens now

averagejoe123

TheChizler wrote: »

Thanks for the info! Don't have one yet but had several pre-application reviews and I've been sure to ask them all what their terms on overpayment are. Talked to Ulster Bank, Permanent TSB, AIB, KBC so far. AIB and KBC seemed the most flexible, the lady in Permanent TSB looked at me funny when I asked about overpaying...

Edit: Just realized your question possibly wasn't directed at me! :pac:

I would not base my mortgage decision on who will be more flexible in terms of overpayments. I would be looking at the rates and the money back offers. Also don't forget it is far easier now to switch between banks in pursuit of the best offers. Have a look here and see the best available rates for variable and fixed mortgages in Ireland at the moment https://www.askaboutmoney.com/threads/best-buy-for-50-ltv-mortgages-i-e-the-lowest-mortgage-rates-available.205864/


You also have the option to put a portion of your mortgage on a fixed rate and the other portion on a variable rate should you wish to make regular significant overpayments.

averagejoe123

mirrorwall14 wrote: »

Well we had to write a personal statement as to how we would pay off the mortgage in the event of something happening the uninsured partner, we included that we planned to over pay the mortgage so it would be wierd if they didn’t allow it.

However as I just replied there, they seem to be very confused as to what’s happening without our mortgage when we rang today. Just have to see what happens now

This is quite strange from your bank. When people overpay a mortgage they will usually have a default allocation of the funds to reduce the term unless instructed otherwise. Most will check to ensure how you wish to allocate the additional payment.

I would follow up with them and ask what they require from you to handle all future overpayments. It should not be more than a brief letter/email to their mortgage department

TheChizler

averagejoe123 wrote: »

I would not base my mortgage decision on who will be more flexible in terms of overpayments. I would be looking at the rates and the money back offers. Also don't forget it is far easier now to switch between banks in pursuit of the best offers. Have a look here and see the best available rates for variable and fixed mortgages in Ireland at the moment https://www.askaboutmoney.com/threads/best-buy-for-50-ltv-mortgages-i-e-the-lowest-mortgage-rates-available.205864/

Absolutely, lowest lifetime cost will affect my choice, whether that's through rates or what's allowed with overpayments. Both if I'm bothered enough to put a decent spreadsheet together!

mirrorwall14

averagejoe123 wrote: »

This is quite strange from your bank. When people overpay a mortgage they will usually have a default allocation of the funds to reduce the term unless instructed otherwise. Most will check to ensure how you wish to allocate the additional payment.

I would follow up with them and ask what they require from you to handle all future overpayments. It should not be more than a brief letter/email to their mortgage department

Got a callback all ok thank god. Repayments are coming off the principal and term has reduced. Currently if we continue on track we’ll take over ten years off the term but we can always revert to the original term should we wish to and the repayment would be lower. If we reverted now we’ve already taken 60e off the monthly repayment

Edit OP I’ve no idea why you are having hassle overpaying. We’ve had no issues with overpaying haven. Just made one written request to increase the DD and have the overpayment amount be taken off the principle

averagejoe123

mirrorwall14 wrote: »

Got a callback all ok thank god. Repayments are coming off the principal and term has reduced. Currently if we continue on track we’ll take over ten years off the term but we can always revert to the original term should we wish to and the repayment would be lower. If we reverted now we’ve already taken 60e off the monthly repayment

Edit OP I’ve no idea why you are having hassle overpaying. We’ve had no issues with overpaying haven. Just made one written request to increase the DD and have the overpayment amount be taken off the principle

The part about reverting to the original term at any stage isn't standard practice but if you have it in writing happy days.

mirrorwall14

averagejoe123 wrote: »

The part about reverting to the original term at any stage isn't standard practice but if you have it in writing happy days.

No, over the phone. Should I get it in writing??

averagejoe123

mirrorwall14 wrote: »

No, over the phone. Should I get it in writing??

I would be asking for it in writing as with most banks you will have a lot of difficulties making changes to a mortgage if you run into financial problems. My earlier argument is that you will not have these issues if you reduce the principal rather than the term.

Diemos

mirrorwall14 wrote: »

However as I just replied there, they seem to be very confused as to what’s happening without our mortgage when we rang today.

That sounds far more like them.
Perpare to be told 10 different things by 10 different people.

We sent in a letter and nothing happened.

Diemos

mirrorwall14 wrote: »

Got a callback all ok thank god. Repayments are coming off the principal and term has reduced. Currently if we continue on track we’ll take over ten years off the term but we can always revert to the original term should we wish to and the repayment would be lower. If we reverted now we’ve already taken 60e off the monthly repayment

Edit OP I’ve no idea why you are having hassle overpaying. We’ve had no issues with overpaying haven. Just made one written request to increase the DD and have the overpayment amount be taken off the principle

Get that in writing, we were told numerous things we wanted to hear over the phone, only to be denied in the next call. Even by the same perosn in one case.

We've been told what you are doing is impossible. No DD.
That every time we make a payment,it will have to be accompanied by a letter of intent, otherwise the payment will simply sit in our account as credit.

mirrorwall14

Diemos wrote: »

Get that in writing, we were told numerous things we wanted to hear over the phone, only to be denied in the next call. Even by the same perosn in one case.

We've been told what you are doing is impossible. No DD.
That every time we make a payment,it will have to be accompanied by a letter of intent, otherwise the payment will simply sit in our account as credit.

Ok that’s nuts. We definitely have the DD running correctly and I have the letter they sent with the reduction in term that will happen due to the increased monthly DD payment. My only concern based on the above is that they wouldn’t let us switch back to the original term and decrease the monthly payment accordingly in the event of an issue.

To be honest though if the worst came to the worst and the **** hit the fan I can’t see a judge allowing them to evict us rather than go back to the original term and reduce the monthly payment. Particularly since we have specifically been over paying due to the life insurance situation and informed them we would be before we even drew down the mortgage

GingerLily

mirrorwall14 wrote: »

To be honest though if the worst came to the worst and the **** hit the fan I can’t see a judge allowing them to evict us rather than go back to the original term and reduce the monthly payment. Particularly since we have specifically been over paying due to the life insurance situation and informed them we would be before we even drew down the mortgage

Do you want to have to go to court and ruin your credit rating?

The advise here is to help you avoid arrears so you don't ruin your chances going forward for future credit.

You would have no legal right to your original term anyway once you altered your contract, the bank essentially will need up reissue the loan if you want to extend the term, it's easy to shorten a mortgage, difficult to lengthen.

I would personally pay off the term as it means less money is paid in interest, I took the longest term possible on my mortgage with that in mind.

sunnyday1234

GingerLily wrote: »

mirrorwall14 wrote: »

To be honest though if the worst came to the worst and the **** hit the fan I can’t see a judge allowing them to evict us rather than go back to the original term and reduce the monthly payment. Particularly since we have specifically been over paying due to the life insurance situation and informed them we would be before we even drew down the mortgage

Do you want to have to go to court and ruin your credit rating?

The advise here is to help you avoid arrears so you don't ruin your chances going forward for future credit.

You would have no legal right to your original term anyway once you altered your contract, the bank essentially will need up reissue the loan if you want to extend the term, it's easy to shorten a mortgage, difficult to lengthen.

I would personally pay off the term as it means less money is paid in interest, I took the longest term possible on my mortgage with that in mind.

Yes yes yes, its much better to leave the term long in and payments reduced in case you run into financial hardship down the road. We have brought out monthly payments down from around several hundred euro but left the term the same. This has given us the luxury of one person being able to pay the mortgage if needed... its a lot of pressure off your back

mirrorwall14

GingerLily wrote: »

Do you want to have to go to court and ruin your credit rating?

The advise here is to help you avoid arrears so you don't ruin your chances going forward for future credit.

You would have no legal right to your original term anyway once you altered your contract, the bank essentially will need up reissue the loan if you want to extend the term, it's easy to shorten a mortgage, difficult to lengthen.

I would personally pay off the term as it means less money is paid in interest, I took the longest term possible on my mortgage with that in mind.

Of course not? I already said I’m getting it in writing from them. The aim was never for us to reduce our term (and lose the original length) for obvious reasons and they have told us multiple times that that’s fine including before drawdown. We did not request the term be reduced. The OP has had a totally different experience with the same bank, hence the confusion. I’ll see what they come back with in the letter

mirrorwall14

sunnyday1234 wrote: »

Yes yes yes, its much better to leave the term long in and payments reduced in case you run into financial hardship down the road. We have brought out monthly payments down from around several hundred euro but left the term the same. This has given us the luxury of one person being able to pay the mortgage if needed... its a lot of pressure off your back

This is what we want to do. We have been assured that we can and are doing it. The repayments are already down by 60e a month apparently

Overpaying reduces the term regardless of the option you choose though so I don’t think the wording of “reduce payment” and “reduce term” make it very clear.

If you chose the “reduced payment” option and are overpaying continually the term will reduce to the same level as if you were overpaying and opted for the “reducing term”.

If you drop back to your original payment on a “reduced payment” mortgage the term reverts to a longer term (which will be determined by how much was over paid but still shorter than the origainl term) while the length of the term of a “reduced term” overpayment will be the same term as the term that the “reduced payment” mortgage reverts to except that’s now the max term.

The biggest difference, and it could be a very important one, is that on the “reduced payment” type your can drop to a payment lower than your original mortgage payment if you run into trouble (and the term will extend out back to your origainl term) and this could be very helpful while on a reduced term your origainal repayment is your minimum.

Now for most people they will never drop below the original payment so calling it a “reduced payment” option really doesn’t make it clear that it’s the same as the other option really with an added extra.

This is my understanding of how it works anyway and the “reduced payment” option is by far the better option.

thelastpogue

Diemos wrote: »

Get that in writing, we were told numerous things we wanted to hear over the phone, only to be denied in the next call. Even by the same perosn in one case.

We've been told what you are doing is impossible. No DD.
That every time we make a payment,it will have to be accompanied by a letter of intent, otherwise the payment will simply sit in our account as credit.

"Unfortunately Haven accounts do not have the facility to make electronic transfers into them.
In order to make any additional payments or lump sum payments, you would need to post in either a bank draft or cheque to our head office, Haven, No 2 Burlington Road, Dublin 4.
You will need to include a written instruction with this explaining what you want to do, including your account number & signed by all parties on the loan"

I was told the same as this when I asked about how to make overpayments with Haven, above is what they told me. They are an AIB subsidiary, don't know why they can't let me associate my mortgage account with my AIB online bank account and let me make internet transfer. A cheque with a letter is crazy in this day and age!

Have you any idea how long it takes the cheque and payment to be made off of your account? And do they send anything to acknowledge what they have actually done?

Padkir

TheChizler wrote: »

Is it possible to split it between fixed and variable, and make the overpayments towards the variable portion?

Yes. That's exactly what we are doing and it is working well.

jayjay2010

I contacted PTSB who confirmed that overpayments CAN be made, but nobody seems to know where the money goes when the overpayments are made. I just noticed on their website through a PDF sheet that overpayments will build up as a credit. What's the point in that?

Does anybody have a mortgage with PTSB and making overpayments, if so where does the money go?

Last thing I want to do is make regular overpayments for the money to just sit there doing nothing....

sunnyday1234

jayjay2010 wrote: »

I contacted PTSB who confirmed that overpayments CAN be made, but nobody seems to know where the money goes when the overpayments are made. I just noticed on their website through a PDF sheet that overpayments will build up as a credit. What's the point in that?

Does anybody have a mortgage with PTSB and making overpayments, if so where does the money go?

Last thing I want to do is make regular overpayments for the money to just sit there doing nothing....

Honestly, listening to this absolute nonsense that people are being told by banks makes me want to recommend moving your mortgage to AIB. They are superb to deal with and i have never ever had an issue with them with multiple mortgages

vmb

Diemos wrote: »

Get that in writing, we were told numerous things we wanted to hear over the phone, only to be denied in the next call. Even by the same perosn in one case.

We've been told what you are doing is impossible. No DD.
That every time we make a payment,it will have to be accompanied by a letter of intent, otherwise the payment will simply sit in our account as credit.

I have a Haven mortgage, overpaying a lot of money per month from day one.

We only needed to request it to the broker - we want to overpay every single month. Instead of doing regular overpayments, we changed the amount to be paid.

We could revert the payments to the original amount if needed at any time, and we do not have to worry about sending the overpayment requests every single month.

I couldn't be happier about this decission, we've reduced the interest about 120k and we'll finish the mortgage in 2021 instead of 2045! Our overpayment is very high, but even a small overpayment could make a great difference, specially if you start early

mirrorwall14

vmb wrote: »

I have a Haven mortgage, overpaying a lot of money per month from day one.

We only needed to request it to the broker - we want to overpay every single month. Instead of doing regular overpayments, we changed the amount to be paid.

We could revert the payments to the original amount if needed at any time, and we do not have to worry about sending the overpayment requests every single month.

I couldn't be happier about this decission, we've reduced the interest about 120k and we'll finish the mortgage in 2021 instead of 2045! Our overpayment is very high, but even a small overpayment could make a great difference, specially if you start early

Not just me then thank God. Our mortgage was set up with a broker too but we sent the higher DD letter with Haven themselves

runawaybishop

jayjay2010 wrote: »

I contacted PTSB who confirmed that overpayments CAN be made, but nobody seems to know where the money goes when the overpayments are made. I just noticed on their website through a PDF sheet that overpayments will build up as a credit. What's the point in that?

Does anybody have a mortgage with PTSB and making overpayments, if so where does the money go?

Last thing I want to do is make regular overpayments for the money to just sit there doing nothing....

The money will sit there unless you write to them and request the money is taken off the principle.

Diemos

thelastpogue wrote: »

"Unfortunately Haven accounts do not have the facility to make electronic transfers into them.
In order to make any additional payments or lump sum payments, you would need to post in either a bank draft or cheque to our head office, Haven, No 2 Burlington Road, Dublin 4.
You will need to include a written instruction with this explaining what you want to do, including your account number & signed by all parties on the loan"

I was told the same as this when I asked about how to make overpayments with Haven, above is what they told me. They are an AIB subsidiary, don't know why they can't let me associate my mortgage account with my AIB online bank account and let me make internet transfer. A cheque with a letter is crazy in this day and age!

Have you any idea how long it takes the cheque and payment to be made off of your account? And do they send anything to acknowledge what they have actually done?

That was the same info I got.
Even thought your Loan account number is the account part of your IBAN therefore must be unique to you.

It took us over 2 months from the date they recieved it.
Yes, once they have processed it, they send you a letter.

fatbhoy

averagejoe123 wrote: »

...

You would be better off asking your bank to allocate the overpayments off the capital and not the term. It will vary by bank by bank as to how easy/difficult this is. I am with AIB and it couldn't be easier.

...

So how exactly do you get them to take your overpayment off the principle?

I'm with AIB; I do overpayments; they offer two types: to reduce term, or to reduce monthly payment. I wanted to get them to take my overpayment off the principle (i.e. the capital), but those were the only two options they gave me, and they were very vague about paying off the principle and not the interest part.

They instructed me to do this:
- Transfer the overpayment amount into the mortgage account
- Then send letter/email to them saying that I want it to be used to reduce the term. If I didn't send the letter, the default is to leave the term as is and reduce the monthly payment.

Either way, it appears to me that the overpayment is being used to reduce the principle and the interest.