Bank fee for lump sum repayment on fixed mortgage

purple puffin

Hi, I am just over 2 years into a 5 year fixed mortgage.
The bank allow us to overpay 10% on our monthly repayments without penalty so we do this already.
In addition to this, I am now thinking of making a lump sum overpayment. I know the bank impose a funding fee for a lump sum overpayment but does anyone have any experience of how much this is likely to be or how it would be calculated? E.g pay €20k off a €220k balance.

dotsman

Your loan contract should contain this information.

For AIB, it is:

AIB wrote:

We calculate the early repayment charge using the following formula: (A) X (U) X (D %) = € ERC [early repayment charge], where:

(A): Amount of your mortgage loan being repaid early, or converted to another interest rate.

(U): Number of months remaining before the fixed interest rate is due to expire, divided by 12.

(D%): Difference between your original fixed interest rate at the start of the fixed interest rate term, for the full fixed interest rate term, and the applicable fixed interest rate offered by the Bank at the time the mortgage loan is repaid or converted, for the period of (U).

for more info, see https://aib.ie/our-products/mortgages/Home-Mortgages-Regulatory-Information (about half-way down)

Henry Ford III

Ask the bank directly.

monday monday

kawallace1 wrote: »

Hi, I am just over 2 years into a 5 year fixed mortgage.
The bank allow us to overpay 10% on our monthly repayments without penalty so we do this already.
In addition to this, I am now thinking of making a lump sum overpayment. I know the bank impose a funding fee for a lump sum overpayment but does anyone have any experience of how much this is likely to be or how it would be calculated? E.g pay €20k off a €220k balance.

im with BOI. was quoted €1100 to knock €15,000 of our mortgage balance of €143000.

Cape Clear

kawallace1 wrote: »

Hi, I am just over 2 years into a 5 year fixed mortgage.
The bank allow us to overpay 10% on our monthly repayments without penalty so we do this already.
In addition to this, I am now thinking of making a lump sum overpayment. I know the bank impose a funding fee for a lump sum overpayment but does anyone have any experience of how much this is likely to be or how it would be calculated? E.g pay €20k off a €220k balance.

Ring the bank and they will come back to you in writing to confirm the penalty. No harm in looking at one of these calculators if you are unsure if this is the best use of a lump sum.

https://personalbanking.bankofireland.com/borrow/mortgages/calculators/overpayments-calculator/

Q&A

kawallace1 wrote: »

Hi, I am just over 2 years into a 5 year fixed mortgage.
The bank allow us to overpay 10% on our monthly repayments without penalty so we do this already.
In addition to this, I am now thinking of making a lump sum overpayment. I know the bank impose a funding fee for a lump sum overpayment but does anyone have any experience of how much this is likely to be or how it would be calculated? E.g pay €20k off a €220k balance.

The best advice you'll get on here is contact the bank directly. Your break fee will be based on the cost of funds (for the bank) and how this has changed since you took out your fixed rate mortgage. It changes daily so best you'll get on here are ball park figures.

Depending on the bank they should be able to tell you over the phone. Worst is Ulster who do everything via letter every time you enquire.

purple puffin

Update - I had originally rung bank and was quoted a fee of €270. Was consulting boards as it seemed so low that I thought it might be a mistake!
As mentioned above, fee changes every day. Ultimately paid BOI a break fee of just €275 to pay €20k off a €220k balance. This knocked over 1.5 years off our mortgage term which should save us over €10k interest