No penalty/break fees to Overpay PTSB (UB) Fixed rate mortgage?

[SPC100]

That is more flexibility than you are claiming but less than what they have told me.

 

[SPC100]

1) Is there a break fee for the early repayment or overpayment of a fixed rate mortgage?

The answer to that is fairly clear-cut. PTSB, as with all other banks, charges a break fee, when someone breaks out of a fixed rate mortgage or overpays a fixed rate mortgage.

Here is my letter. Confirming what multiple agents said to me on phone.

I accept they do refer to my mortgage account so it's not generic. But it's not limited in time like you would expect it to be if there was a chance of a penalty depending on change in market rates.

 

[SPC100]

If you look at this 2019 key post on how overpaying at PTSB works, it talks about the PTSB ability to build up credit by overpaying (for a payment holiday) and get a lower effective interest charge. You can see in this 2022 post on that thread, That "Paul F" confirms you can build up credit on a fixed rate mortgage, and you re-confirm it too!!!!

See my earlier post, highlighting this was reflected on aam years ago.

Paul appears to distinguish between paying off full (fees may apply) or overpaying (no fees).

 

[Thomas1]

No Brendan I don't think you are correct here for PTSB specifically.

Thomas changed rate. In PTSB speak He broke out of his fixed rate. He changed product. Hence he may have a fee.

He didn't just overpay a fixed rate mortgage.

Additionally he confirmed that he is on fixed, overpaying and benefitting from lower interest.

Have a look more carefully at text from your image. (AI did the copy paste from image so text may not be perfect)

Fixed Rate Loans
It is possible to overpay your mortgage when on a Fixed Rate, either through an increased monthly repayment or a lump sum payment. You will benefit from reduced interest charged as interest is based on your outstanding balance minus the overpayment amount. Your monthly repayment amount will not change, however, as the monthly interest amount due has reduced, you can pay off your mortgage over a shorter term. Should you wish to reduce your balance by the overpayment amount, and benefit froma lower monthly repayments, by applying the overpayment amount to the outstanding balance, a fee may be applicable, as outlined below.

Correct on the above SPC100.

As I see it, PTSB always reserve the right to apply a breakage fee for product change or overpayment BUT they allow a certain level of overpayment to be used as a “credit” again the balance and/or to cover repayments for a period. At what point the credit becomes a breakage fee applicable overpayment isn’t defined, or perhaps buried deep in the T&Cs somewhere.

My lower interest rate and fixed rate period started two days after I returned the signed form, quite efficient. The credit amount that I had lodged previously is still sitting an overpayment on the app.

 

[Brendan Burgess]

So what you are saying is the following:

1) If you break out of a fixed rate for your whole mortgage to switch to a lower rate, you may face an early repayment fee.

2) If you pay a lump sum off your mortgage and ask them to reduce the repayment amount (or presumably term) you may face an early repayment fee.

3) But if you just pay a lump sum off your mortgage and continue with your normal repayments, the lump sum will be put into a credit account and you will not be charged a break fee.

Is Point 3) on their website or in your contract? I know you have a letter saying you will not be charged a fee, but another customer cannot claim "You told some guy on Askaboutmoney or Reddit that there is no fee"

Brendan

 

[SPC100]

Point 3 is written in the terms that you posted in your image earlier. And highlighted in the text that I subsequently bolded from your image.

 

[SPC100]

For point two, term will decrease by default that's covered in terms you posted.

 

[Brendan Burgess]

For point two, term will decrease by default that's covered in terms you posted.

So if you pay off a lump sum and keep your repayments the same, they will not charge you an early break fee?

 

[Brendan Burgess]

Fixed Rate Loans
It is possible to overpay your mortgage when on a Fixed Rate, either through an increased monthly repayment or a lump sum payment. You will benefit from reduced interest charged as interest is based on your outstanding balance minus the overpayment amount. Your monthly repayment amount will not change, however, as the monthly interest amount due has reduced, you can pay off your mortgage over a shorter term. Should you wish to reduce your balance by the overpayment amount, and benefit froma lower monthly repayments, by applying the overpayment amount to the outstanding balance, a fee may be applicable, as outlined below.

I have to say that ptsb is not wording this very well.

I would like them to say " Should you wish to reduce your balance by the overpayment amount.. a fee may be applicable. However, if you leave the money in credit and do not reduce your balance, no fee will be charged."

This is the type of vague wording which gives rise to complaints to the Ombudsman.

But it does seem clear enough to me that they are allowing people to overpay a fixed interest loan without penalty.

Brendan

 

[Thomas1]

I have to say that ptsb is not wording this very well.

I would like them to say " Should you wish to reduce your balance by the overpayment amount.. a fee may be applicable. However, if you leave the money in credit and do not reduce your balance, no fee will be charged."

This is the type of vague wording which gives rise to complaints to the Ombudsman.

But it does seem clear enough to me that they are allowing people to overpay a fixed interest loan without penalty.

Brendan

It’s a good feature no doubt but could be advertised more clearly.

Technically, your balance isn’t decreasing and you haven’t made an overpayment, you are just getting an offset benefit from the credit amount (which you can’t withdraw once made).

 

[SPC100]

Brendan where did you get the terms and conditions. IIRC, The ones I had seen (posted pdf earlier in thread) didn't actually state this. So I sent a small payment first to test it.

 

[SPC100]

additionally for point 2, there is no fee for reducing payments. As per my letter you can choose term reduction (by default you get this, and you still have the credit in case you miss payment) or payment reduction(in which case you no longer have the credit).

The reduced payments is not well supported in ts and cs, and the redemption figures that turned up showed I would have no break fee, so it would be good for others to verify this point. But I'm relatively confident on it too.

For point two, term will decrease by default that's covered in terms you posted.

 

[Brendan Burgess]

the redemption figures that turned up showed I would have no break fee,

Again, the fact that there was no break fee for you at this particular time in the interest rate cycle means nothing for other borrowers at a different time in the cycle.

Brendan

 

[SPC100]

Again, the fact that there was no break fee for you at this particular time in the interest rate cycle means nothing for other borrowers at a different time in the cycle.

Brendan

I think you missed my point.

 

[Brendan Burgess]

Hi SPC

The point is that ptsb has rules.

The fact that someone says that they paid no break fee does not mean that someone else will not pay a break fee.

There is a real danger that someone reading this thread will say "Ah SPC paid no break fee, therefore no break fee applies to me". That is what I am trying to protect against.

Brendan

 

[SPC100]

I agree with that regardless. I would advise anyone to ring PTSB first and get it in writing. That's prudent.

My point was exactly that, that others should verify.

I have looked some more and many of their terms and conditions that I find many that only contain the default break fee calculations and say it apply to partial overpayment.

E.g. this is from their general mortgage terms and conditions on their website:

Whenever (i) repayment of a loan in full or in part is made, or (ii) with the agreement of permanent tsb, the
loan is switched to a variable rate loan, or other fixed rate loan, before expiry of the Fixed Rate Period
(hereinafter called the “Early Termination“), the Applicant shall, in addition to all other sums payable as a
condition of and at the time of the Early Termination, pay a sum equal to the permanent tsb’s estimate of
the loss (if any) arising from the Early Termination. In the calculation of the said loss permanent tsb shall
endeavour to apply, in so far as it is fair and practicable, the formula C=(I-S) x R x (M-T) where C is the
charge to compensate for the loss(if greater than 0), I is the swap/market fixed interest rate for the term of
the Fixed Rate Period at the date of its commencement, S is the swap/market interest rate for the remaining
fixed period, R is the amount of the Fixed Rate loan balance paid or switched at the date of Early
Termination, M is the Fixed Rate Period and T is the time expired of the Fixed Rate Period at the date of
Early Terminatio

 

[Brendan Burgess]

Hi SPC

Would you summarise the situation as you see it?

Because it is very confusing for me. And I am sure it is confusing for others as well.

When break fees apply.
When break fees do not apply.


Or I can summarise it and you can correct or clarify it.

Brendan

 

[SPC100]

The simple summary for PTSB fixed rate mortgages remains as per my first post

PTSB say I can pay as much as I want with no penalty/break fees. There would only be fees, if I paid it off fully before the fixed term ends.

They didn't do a breakage fee calculation specific to my mortgage, they said it's their policy.

Please, Before you do an overpayment on your fixed rate mortgages check with PTSB, in case this was somehow specific to my mortgage ( I fixed at a low rate and transferred from UB), as this is very surprising amount of flexibility.

More detailed summary:

At least four different PTSB staff say their policy is:

1. If you change your fixed interest rate during the fixed period, break fees may apply.
2. If you pay off fully during fixed period, break fees may apply
3. If you overpay and keep your payment the same, no fees apply. This is the default option if you overpay. The overpayments build up in a credit account, and reduce the interest charged. You can also use overpayments to subsequently fund a payment holiday. You can't get them refunded back to you though.
4. (There is some doubt about this point) If you overpay and reduce payments no fees apply. In this case you no longer have credit in your account, the credit had been applied to your mortgage balance. If you want to use this option be even more careful to check with PTSB, as all ts and cs indicated that break fees could be applied in this case.

Other users online have repeatedly confirmed points 1 to 3. Including someone who worked in PTSB mortgages. Brendan found terms and conditions that confirm 1 to 3. Other terms and conditions online indicate that fees will apply.

I used option 3 and 4. But that's not proof positive that this is PTSB policy, as when I subsequently asked for redemption figures they indicated for my specific mortgage their would have been no break fees anyway.

There is one report I found online of being charged fees for overpaying but that was a commercial mortgage.