Lump-sum Payment

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lambrush19

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We intend to make a lump-sum payment of €142k on a tracker mortgage with an existing outstanding balance of €218k.

I have three questions:

(1) My understanding is that there are no penalties on lump-sum payments on tracker mortgages with PTSB. This is what PTSB told me today and the T&Cs do not say anything about penalties on lump-sum payments but I wanted to check if my understanding is correct? In short, can we make multiple lump-sum payments without incurring any penalties or charges?

(2) Our priority is to pay off the rest of the tracker mortgage as soon as possible. PTSB told me today that we have the option, if we make a lump-sum payment, to either (a) reduce our scheduled monthly repayments to allow us to pay over the original term or (b) reduce our original term while keeping our monthly repayments the same or lower. Neither of these options appear to be relevant for us, given our priority? Is that right or am I missing something?

(3) Is there an option under a PTSB tracker mortgage whereby one can increase the monthly repayment?

Thanks, in advance, for any help with these questions.
 
Yes, you can pay anything off a tracker without penalty because it's a variable rate, only fixed rates have restrictions on lump sum payments.

As for the options just pick one, it doesn't matter in your case if you intend clearing it early but they need some option chosen, (a) means if the you know what hits the fan you are only obliged to make the lower payments whereas (b) keeps you on same payment as you have now.

Don't know about increasing the monthly repayment, you'd have to ask, many lenders do allow it and some allow you set up a separate standing order to pay an extra amount in tandem with direct debit payments.
 
lambrush19 said:
€142k on a tracker mortgage with an existing outstanding balance of €218k.
Click to expand...

From the other thread you have 19 years left on your mortgage.

After you reduce the mortgage to €76k, your term of 19 years, by default the term will remain the same and the repayment will fall to €400 a month.

However, you can tell ptsb that you want to repay the mortgage over, say, 5 years and they will adjust the repayment to €1,300 a month.

If you want to repay more than this reduce the term to shorter than 5 years.

Brendan
 
Thanks to you both.

One follow-up question: If we maintain the monthly repayment at its current level (€1200), will the principal continue to fall at the same rate per month? (At the moment, it is falling by €750 per month.)
 
As the principal falls, the actual interest charge falls.
So if you pay the same fixed amount, the amount of capital will be slightly higher each month.

Brendan
 
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