BoI overpayment and changing to fixed rate

[BusinessFailure]

I've rang BoI twice and got different answers each time, so was hoping someone on AAM might have done something similar:

We are overpaying on our current SVR mortgage, but will likely change to a fixed rate mortgage for a year since it's 1.15% less. On the BOI website, they say that there's a max 10% overpayment on fixed term mortgages (much less than what we're overpaying currently).

One BOI employee said that we could keep our existing overpayment level, the 10% cap is only if you added an overpayment after going fixed. Another BOI employee said we'd have to reduce our overpayment to 10% after going fixed.

Has anyone on here done something similar and know which employee is correct?!

 

[pauric]

When I called up a couple of months ago and said I was leaving I was offered a 3.3% variable which I took until I get myself switched to the EBS 2% cashback offer.

I was on a 1 year fixed at 3.4%, they told me that if I started to overpay at my new SVR and then switched to a fixed rate again then the overpayment would stay as is even if it is more than the 10%.

Best you get it all in writing though

 

[Brendan Burgess]

I would argue that people in general should not fix their mortgage rates at the moment.

However, someone who is overpaying should definitely not fix.

If you insist on doing so, the answer is

1) Before you fix go to BoI and reduce the term of your mortgage so that the higher monthly payments you are making are the normal payments.
2) Then fix.

You will be stuck with the new higher repayments and won't be able to reduce them. But you will be able to pay 10% more.

But in general, you should not fix to get a better rate. You should switch to another lender who does not exploit variable rate borrowers more than they exploit fixed rate borrowers.

 

[BusinessFailure]

Thanks for the replies Pauric and Brendan. Unfortunately, switching lenders would be hard with my current employment status, so I thought about fixing for a year (after which I'll be in a much better position and plan to switch then).

I'll give them a call and see if they'll lower my variable rate under the "threat" of switching . If not, I might do what you suggest Brendan.

Thanks.

 

[Brendan Burgess]

If you can't switch, getting the lower variable rate is the best idea. If they refuse that, fix for one year.

Brendan

 

[RichInSpirit]

Just a suggestion, don't know if it's possible. Could you go for 50% fixed / 50% variable? Have the best of both worlds.
It might not be possible of course.

 

[lukas888]

Yes you can normally fix an amount of your choosing and leave the remainder variable.

 

[BusinessFailure]

Thanks for the suggestions. BOI do allow a split so I'll ask them about that as well.