AIB says mortgage overpayments can only be made by bank draft

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Adelie

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Partner wants to make an overpayment but the overpayment form says non-AIB account holders need to pay by bank draft. Is that true or can we overpay just by transferring money to the mortgage account?
 
You can just transfer from the another bank into the AIB mortgage account. Ideally if you have internet access to the account you can see/check the transfer arrives. There is no harm in sending a small test amount first.
 
Adelie said:
Partner wants to make an overpayment but the overpayment form says non-AIB account holders need to pay by bank draft. Is that true or can we overpay just by transferring money to the mortgage account?
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Have you checked with AIB if there will be a break fee/early redemption charge if you make this overpayment?
 
consider switching to fixed, due to the way the calculation works out with AIB, you could get cheaper rate with fixed (3 years, 5 years or green 5 years) as well as making overpayment without penalty. (I switched to fixed in June with AIB and have been overpaying for the last 2 months without penalty charge)

Have a read of this thread, it should become clearer to you how it works

Overpayment / re-fix flexibility of AIB's green 5yr fixed rate (and some other rates)

Moderator's note: Because of a quirk in how AIB calculate their break fee / early redemption charge, you can make unlimited overpayments on some of their fixed rates without penalty. Or you can break out of your existing AIB fixed rate and re-fix on a different rate, again without penalty. (You...
www.askaboutmoney.com

Hope this helps.
 
I am in the same situation (AIB have tracker) and am consider making a lump sum payment but was surprised to see that it could only be done by cheque/draft.
 
BigPineapple said:
consider switching to fixed, due to the way the calculation works out with AIB, you could get cheaper rate with fixed (3 years, 5 years or green 5 years) as well as making overpayment without penalty. (I switched to fixed in June with AIB and have been overpaying for the last 2 months without penalty charge)

Have a read of this thread, it should become clearer to you how it works

Overpayment / re-fix flexibility of AIB's green 5yr fixed rate (and some other rates)

Moderator's note: Because of a quirk in how AIB calculate their break fee / early redemption charge, you can make unlimited overpayments on some of their fixed rates without penalty. Or you can break out of your existing AIB fixed rate and re-fix on a different rate, again without penalty. (You...
www.askaboutmoney.com

Hope this helps.
Click to expand...

Interesting, our plan was to make the overpayments and then fix, but if I read it correctly, break charges only apply if interest rates fall, and since interest rates are likely to rise, we could probably fix now and still overpay without penalty
 
@Adelie What is your property's BER (Building Energy Rating)? Check it here or estimate it if necessary.

If it is B3 or higher, you are eligible for the green 5-year fixed rate. Even if you aren't eligible for that, AIB's fixed rates are lower than their variable rates.

Time is not on your side if you are planning to fix. You might be better off fixing first and then overpaying. (Rates are likely to increase in a matter of weeks.) The downside to that is that there might be a break fee when you go to make the overpayment (but there might not).

Also, overpaying your mortgage/reducing your balance may not be the best use of your money. Your priorities should usually be:
  • Paying off expensive debt (credit cards, personal loans, car loans, etc.)
  • Building up an emergency fund in a savings/current account (3 to 6 months' living expenses)
  • Saving money for any expenses you will have over the next few years (kids; buying a car; childcare; adult children going to college, etc.)
  • Maxing out your pension contributions (very large tax relief is given)
  • Overpaying your mortgage
in approximately that order. Consider posting a thread about your situation in the Money Makeover forum.
 
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It’s A2 but we are planning to clear it within a couple of years so we might not fix. Although it sounds like we could fix for 5 years and pay it off in a year or 2 and still not pay overpayment charges. We have done everything else on your list.
 
Adelie said:
It’s A2 but we are planning to clear it within a couple of years so we might not fix. Although it sounds like we could fix for 5 years and pay it off in a year or 2 and still not pay overpayment charges.
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Exactly, it's unlikely that there would be a break fee/early redemption charge (for the foreseeable future) if you make an overpayment or clear the mortgage early while you are the green 5-year fixed rate. Here is the mortgage amendment form if you decide to fix.
 
Adelie said:
It’s A2 but we are planning to clear it within a couple of years so we might not fix. Although it sounds like we could fix for 5 years and pay it off in a year or 2 and still not pay overpayment charges. We have done everything else on your list.
Click to expand...

The way interest rates are going to go in the next few years is more than likely to be up than down (Per the other thread I mentioned earlier, you are effectively going to be paying no penalty for overpaying the way AIB formula works).

I'd suggest that you fix on 5 years green rate as soon as you can first as @Paul F said to get the rate before it change. This should just be a matter of filling in the form and send it via email which can be done in 1-2 hours. Then it is just a matter of waiting to get a confirmation letter

Once you are switched over to fixed, whether you want to clear the mortgage or not in a couple of years, you are paying less interest monthly than you currently are with Variable either way

Then next thing you should probably do is to open a bank account with AIB (Your opening post suggests that you don't have one with them). Banking is free anyway as long as you have a mortgage with them.

Once you have it, just transfer the money in via the AIB App, AIB to AIB it is instant.
 
In relation to the OP - I want to change my current direct debit from my non AIB bank account to overpay my AIB tracker mortgage. As per the OP - it appears that AIB only allow for such changes where you have an AIB account. Is this actually the case and has anyone experience of how to deal with it/work around it without changing accounts.
 
Did no one read my earlier reply? Just transfer money into the morning account online from your other bank's account. You can get the account number from your mortgage statements.
 
I did and may use this option in the interim - so thanks - however what I want to do is set up a revised direct debit incorporating a monthly overpayment so that I have to only deal with the matter once. It appears that AIB don't give you this option unless your bank account is with them - hence the question.
 
A direct debit is when money is pulled from your account. ie your normal mortgage payment, the bank will increase this, but to decrease it you will have to jump through multiple hoops.

What you want to setup is a Standing Order for the extra payment. This pushes money from your account. You should br able to set this up yourself on your banks Internet Banking, which gives you full control the amount and lets you stop/start the extra payment as desired.

The above is assuming you are sending money from another bank into an AIB mortgage, there is/was an internal issue with AIB account to AIB mortgage account.
 
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