Mortgage overpayment calculation

jayjay2010

Just received a mortgage statement for 2020 and I am trying to make sense of the remaining balance.

On 30th Sep balance was 112,884
On 2nd Oct I made a lump sum payment (off principal) of 1,475

Since then I've paid Oct, Nov and Dec instalments approx 500 per month (obviously the vast majority of these instalments went towards interest approx. 30 years remaining on mortgage.)

My mortgage balance as of today is 112,371

So the balance reduced by 513 even though the lump sum was 1,475 and there have been 3 instalments paid since September.

Do these figures make any sense? Am I missing something obvious here?

jimmycrackcorm

Is 500 your normal monthly payment or a reduced rate? Seems low.

manonboard

When you asked to over pay. Did they acknowledge to remove it against the principal? Sometimes they remove it against the term remaining I believe.

I'm not quite sure how that works but I was told to explicitly state it when I overpaid mine. Told by the bank themselves.

Fred Cryton

Yes i think by default they might reduce the time remaining, rather than keeping the time fixed and reducing the monthly payments. Call the bank to clarify.

mick121

I know AIB automatically reduce the monthly rate if you lodge a lump sum.If you want to reduce the principal and keep the same monthly repayment there by reducing the loan term this has to be submitted in writing.
Drop into the customer service desk and they can sort this out for you with no problem.