AIB If you have a split mortgage and you are in the AIB Prevailing Rate cohort...

Brendan Burgess

Brendan Burgess

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You should give serious consideration to paying the interest refund against the warehouse.

AIB is setting part of the write down against the warehouse - e.g. €10,000
If the split mortgage is less than 5 years old, AIB pays a 42% bonus on any money paid off the warehouse.
So they are then writing down the warehouse by a further €4,200

(AIB calls it 30% because they are grossing it up. 30% of €14,200 = €4,200 )

If the split mortgage is over 5 years old, the top up is 25% ( Grossing up 20%)

If your mortgage has just gone by the 5 year deadline, apply for the higher top-up anyway, on the basis that it took them so long to process the payment.

If this has brought your warehouse down to a level which you could clear off in the medium term, it's well worth considering paying the interest refund against the warehouse as well and getting an instant 42% return on it.

  1. It starts the 6 year clock on repairing your credit record, so you will be able to trade up in the medium term​
  2. It means that you will have paid off your mortgage when you reach retirement instead of having to deal with the warehouse​
If you have 20 years left on your mortgage and if you have no intention of trading up, then it might be worth not paying down the warehouse.

Of if you have a very big warehouse and have no hope of clearing it in the short-term, then there probably is no advantage in paying the refund against it.

But if you have 10 years left and a small warehouse, then clear it.

Brendan
 
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Agreed Brendan. To note the redress portion applied to spilt mortgages had an associated 30% adjustment which I noticed today . In my instance this was another 4.5k off the split balance which is very welcome
 
Yes I just received likewise ( the additional 30%). Thank you Brendan for all your hard work . Only for this forum I wouldn’t have known why I received the aib letter
 
Brendan Burgess said:
Have either of you decided to clear your warehouse?

Brendan
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Assuming interest cheque enough then yes we will clear the warehouse which is brilliant . This means we won’t have this hanging over us when mortgage finishes which is not until after state pension age. Thank you for all your persistence and information
 
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That’s right, and between 5 and 10 years there is a 20% bonus, after that there are no extra incentives
 
I confirmed with AIB today that if you received a write down as part of your split, it is being ignored.

Brendan
 
Following my letter on 15th September questioning interest rate calculation as even on simple interest was over 2k less than the calculator .I received a second “acknowledgement “ today ,but I received a second letter responding to my phone call less than 2 weeks ago asking for details of my interest calculation . It was 2,300 euros less than putting same rates into calculator . After checking through I then realised that aib reduced the base amount used for the calculation in December 2015 when our split Parked mortgage started. They reduced the amount by the portion of the “12%” allocated to the parked mortgage but no reference was made to this in the accompanying letter . I assume everyone on split mortgage will also make a similar discovery . As we have not being paying interest on the parked amount I can understand this approach .. would have saved aib work if they had said this in the initial letter
 
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