Increasing mortgage payments

jecca1

We currently have a tracker mortgage with ptsb and we were looking to increase the monthly repayment.
Is this an easy enough process, can it be done over the phone or in branch only.
I dont have any other accounts etc with ptsb and the mortgage was done with a broker so i have never dealt with them.

Liam D Ferguson

I've no experience of doing this with PTSB so I'm afraid I can't answer your query.

But I do have a related point. If you have a tracker mortgage, then I'm guessing that the interest rate you're paying is very low...possibly around or below 1%. So if you have the disposable income to pay extra and you have other debts that are costing you higher interest, e.g. car loans, personal loans, credit cards etc., pay them off first before overpaying your (presumably) cheap tracker loan.

jecca1

We have a ridiculously low rate for the tracker but we havent any other debt at this point. I just want to increase it by a small monthly amount but if it wasnt worth the hassle id leave it.

Stanford

If you are going to overpay make sure you contact PTSB to ensure your overpayments come off the capital part of the loan, that way you will reduce both the interest you pay and the mortgage term.

jecca1

Thanks Stanford, will do.

Klonker

Stanford wrote:

If you are going to overpay make sure you contact PTSB to ensure your overpayments come off the capital part of the loan, that way you will reduce both the interest you pay and the mortgage term.

That's always the case, you can't pay interest that's not there.

Liam D Ferguson

Klonker wrote: »

That's always the case, you can't pay interest that's not there.

I've seen instances where a lender simply "held" overpayments to once side of the mortgage account and did nothing with them because they weren't told specifically what to do. After some years of the customer making monthly overpayments, they noticed that the overpayments weren't seen on the annual mortgage statements. So they contacted the lender. "Oh yes Mrs Customer, all your overpayments totalling €X are here. They haven't been applied off the mortgage because we never received an instruction from you to do so." In effect, all the overpayments were just sitting there doing nothing for years.

So the advice from Stanford above is very good.

homer911

Liam D Ferguson wrote: »

I've seen instances where a lender simply "held" overpayments to once side of the mortgage account and did nothing with them because they weren't told specifically what to do. After some years of the customer making monthly overpayments, they noticed that the overpayments weren't seen on the annual mortgage statements. So they contacted the lender. "Oh yes Mrs Customer, all your overpayments totalling €X are here. They haven't been applied off the mortgage because we never received an instruction from you to do so." In effect, all the overpayments were just sitting there doing nothing for years.

So the advice from Stanford above is very good.

This would apply where the mortgage account has a service account - payments coming in get credited to the service account and debited out again and credited to the mortgage account when they are due. The bank will only take the expected amount from the service account leaving any overpayment behind. If there is no service account, the overpayment will come straight off the capital - it depends on the bank and its systems

phormium

But were they really doing nothing just because there were sitting separately on the account?

I worked in a bank and this was fairly normal unless customer specified that they wanted the overpayment applied to the outstanding balance which would then either recalculate the term or the repayments. The advantage of leaving it sitting there was both the original term and repayment remained the same but obviously the term would finish earlier if it remained there but also you could get it back if needed. While it was 'sitting' there it was still counted as a credit on the account so interest was charged on the net outstanding balance every day so the overpayment was taken into account when calculating interest so same saving as if it had been applied permanently against the overall balance.

There is not two mortgage accounts consisting of capital and interest, it is all the one amount, interest goes on every month, repayment comes off every month.

Henry Ford III

Might be a better idea to start a savings plan if the net return will be more than 1%?

Get proper advice.