# Paying a Lump Sum off my Mortgage through AIB online



## daraclare (1 Apr 2015)

I have a mortgage since 2012 and was recently been informed by a member of staff in AIB Grafton street that I can now transfer a lump sum into my account online which will make it easier to keep up with my mortgage repayments. However, now I've been told the only way to pay a lump sum off my mortgage is by cheque (I don't have a cheque book) or by bank draft, both of which are awkward compared to online transfer.

Has anyone else had this problem, and have you found a way around it?

Thanks in advance!


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## Dermot (1 Apr 2015)

If your online system allows you to transfer the lump sum to your mortgage account that is what I would do.  My understanding would be that the system would then adjust your future mortgage payments automatically.  That is how it used to work for me ????.  I would also send the mortgage section an email of what you had done and ask to have the repayments adjusted to reflect the lump sum.  Quote your account number and mortgage holder/s name/s


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## boe (2 Apr 2015)

Hi Dermot,

By asking for it to be reflected in the 'lump sum', you mean for it to be paid off the capital?


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## 44brendan (2 Apr 2015)

You can transfer to the mortgage account in any branch!


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## Dermot (2 Apr 2015)

Hi boe.



boe said:


> By asking for it to be reflected in the 'lump sum', you mean for it to be paid off the capital?



To be paid off the capital. Yes.

See post No 4 from 44brendan.  He is one of the "good" bankers


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## daraclare (2 Apr 2015)

Hi, I've been onto AIB numerous times this week and I've been told the only way I can pay any extra off my mortgage is to use a cheque, or bank draft. I can't put it directly into the mortgage account unfortunately Dermot, that would be exactly what I want. I was also told I couldn't transfer directly into the mortgage account in the bank either. It's all very frustrating. I'll try again tomorrow and see if I get someone helpful.


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## twofor1 (3 Apr 2015)

You could do a funds transfer on line of €1 directly into your mortgage account, if it gets there safely you have your answer.

I regularly transferred any spare money I had directly into my Danske mortgage account, sometimes it might have been only €20, sometimes a few hundred, and it was never an issue, the outstanding balance dropped immediately and as interest is calculated daily I benefitted immediately.

I would be surprised if you could not do the same with AIB.


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## daraclare (3 Apr 2015)

I can't transfer any money into my mortgage account using online banking, that's the problem. This is exactly what I want to be able to do but AIB won't let me.


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## losttheplot (3 Apr 2015)

I had transferred money to my mortgage account by writing a letter to the mortgage department quoting all the relevant account numbers and the amount. I also specified that I wanted the term reduced and the repayments to remain constant. This is ok for large sums, but would be a nuisance for small frequent amounts.


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## daraclare (3 Apr 2015)

I just found a form online [broken link removed] which I'd have to fill out every time and also get my partner to sign each time and POST it to AIB. Don't get me wrong, I will do itif I have to,  I'm not being discouraged to repay my mortgage off early, but it's ridiculous they can make it so difficult. It should be a matter of popping €500 here and there in whenever you have it.

Thanks everyone for your replies.


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## MauraS (8 Apr 2015)

For the last 2.5 years I reluctantly had to visit an AIB branch each time I wanted to overpay on our mortgage. That was until last December 2014, when I accidently transferred money from my savings account into our mortgage account online (until this date I never had the facility to complete this transaction). We received the usual acknowledgment letter with the sum overpayed and the small change in our monthly repayments a few weeks later from AIB. I assumed it is the same for everyone. Prior to this change, I never filled out a form, never contacted AIB, just transferred the money in the branch and moaned how annoying this was. At the start, AIB told me basically to only contact them if I wanted to change the mortgage term, if I  did not contact AIB  then it was assumed you wanted to reduce your montly repayments.


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## boe (9 Apr 2015)

MauraS said:


> For the last 2.5 years I reluctantly had to visit an AIB branch each time I wanted to overpay on our mortgage. That was until last December 2014, when I accidently transferred money from my savings account into our mortgage account online (until this date I never had the facility to complete this transaction). We received the usual acknowledgment letter with the sum overpayed and the small change in our monthly repayments a few weeks later from AIB. I assumed it is the same for everyone. Prior to this change, I never filled out a form, never contacted AIB, just transferred the money in the branch and moaned how annoying this was. At the start, AIB told me basically to only contact them if I wanted to change the mortgage term, if I  did not contact AIB  then it was assumed you wanted to reduce your montly repayments.


 
That's an important point - if you transfer using the online facility, it reduces your repayments and keeps the term the same. Which is the better approach - reduce the term or the repayments?


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## Mrs Vimes (9 Apr 2015)

I would always say reduce the repayments as it is easier to stop if your circumstances change or indeed if you find a better home for your money.

If you are in a position to overpay your mortgage you presumably have a good handle on your finances and should therefore look at the original mortgage term as a maximum to which you can revert if necessary. I know that a lot of people would spend/waste whatever is left in their account at the end of each month and if you are one of those people then perhaps do reduce the term instead


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## boe (10 Apr 2015)

That makes sense although, reducing your payments instead of the term means you are not saving as much on interest payments?
I have 225k left on my mortgage, paying SVR with AIB at the moment. If I make a lump sum payment of say 25k, I will save approx. 27k in interest if I choose to reduce the term. If I chose to reduce the repayments instead, I'll save approx. 11k in interest.

I'm basing this off Karl Jeacle's mortgage calculator and am assuming I am using it correctly!
https://www.drcalculator.com/mortgage/ie/


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## Redone (10 Apr 2015)

boe said:


> That makes sense although, reducing your payments instead of the term means you are not saving as much on interest payments?
> I have 225k left on my mortgage, paying SVR with AIB at the moment. If I make a lump sum payment of say 25k, I will save approx. 27k in interest if I choose to reduce the term. If I chose to reduce the repayments instead, I'll save approx. 11k in interest.
> 
> I'm basing this off Karl Jeacle's mortgage calculator and am assuming I am using it correctly!
> [broken link removed]



Presumably you'd continue to overpay when you can. It only means the lesser amount is automatically deducted. You can keep paying manually.


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## Mrs Vimes (10 Apr 2015)

As redone says I wasn't suggesting stopping the overpayments or even reducing the monthly payments, just leaving yourself wiggle room to reduce them if necessary. It is a lot easier to just make the minimum payment than to contact the bank and ask them to extend the term to the original term if circumstances change. You'll be glad when the triplets arrive to be able to reduce repayments! 

Also, you cannot add 2035 euro to 2015 euro and get any sort of a sensible answer so the savings over the term or 27k or 11k are not really helpful.


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## boe (10 Apr 2015)

Thanks for the replies. Right, makes sense to give yourself the wiggle room as the bank won't be too worried if you've paid a lump sum off in the past if you run into difficulty down the line. Bit caught up in the variable rates discussion going on at the moment so seeing what I can do to reduce interest I am paying in lieu of anything happening with the rates themselves.


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## Mrs Vimes (10 Apr 2015)

But you will reduce the interest by just as much without formally reducing the term.

Made-up figures:

amount outstanding €250k, term 25 years, monthly payment €1000
pay off a lump sum of €50k
amount outstanding €200k, term 25 years, monthly payment €800

choice between
A. telling the bank to reduce the term to 20 years and pay €1000 per month
or 
B. tell the bank to reduce the payment to €800 per month and keep the term at 25 years.

choose hidden option C. tell the bank to reduce the payment and keep the term and then pay €1000 per month anyway for as long as it suits you and then if you hit a problem in a few years time you do not need permission to drop the payment to €800 (actually a lot less than €800 if you keep overpaying).

25 years is a very long time and you don't know what will happen so keep your options open.


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## elcato (10 Apr 2015)

What's the differance between B and the hidden option C ? Is B not the default ?


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## Mrs Vimes (11 Apr 2015)

Hi elcato,

B and C are indeed the same, I am just trying to get across the idea that keeping the minimum contractual payment as low as possible does not in any way preclude you from overpaying and shortening the term while retaining the right to revert to the original term should it suit in the future.


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