No penalty/break fees to Overpay PTSB (UB) Fixed rate mortgage?
- Thread starter SPC100
- Start date
I did a small transfer into my mortgage as a test. In the mobile app.
The 'remaining balance' decreased by the amount of the transfer. The 'arrears/prepayment' field stayed at 0. And so far the next payment amount has not changed.
I may not be a perfect test case of overpaying a fixed mortgage penalty free, as my redemption letter arrived and it indicates there would be no current penalty for paying off my mortgage early. (Probably because I fixed at a low rate)
The 'remaining balance' decreased by the amount of the transfer. The 'arrears/prepayment' field stayed at 0. And so far the next payment amount has not changed.
I may not be a perfect test case of overpaying a fixed mortgage penalty free, as my redemption letter arrived and it indicates there would be no current penalty for paying off my mortgage early. (Probably because I fixed at a low rate)
Did they set up a new account for the credits to be transferred to or did you transfer direct to the mortgage account?
I got some further clarifications from an agent on a phone call;
When you send the money, without filling out a form signalling your intent, it acts "as credit" i.e. by default your monthly payments don't change, and the term is reduced. I understand, the principal is reduced, and the annual interest added to your account would hence be lower, and more of your monthly pay is actually going against the principal, resulting in a shorter term. In "credit" mode, if you missed a direct debit, it would be paid from this credit, or if you applied for a payment holiday it would be paid from this credit.
*BUT* if you want to reduce your monthly payments, you must fill out the overpayment form, and specify to use the credit to reduce payments, but in this case, you no longer have 'credit' on your accout, so you can no longer use the overpayment for a future holiday. I was surprised by this lack of flexibility, but have not yet re-confirmed with another call.
When you send the money, without filling out a form signalling your intent, it acts "as credit" i.e. by default your monthly payments don't change, and the term is reduced. I understand, the principal is reduced, and the annual interest added to your account would hence be lower, and more of your monthly pay is actually going against the principal, resulting in a shorter term. In "credit" mode, if you missed a direct debit, it would be paid from this credit, or if you applied for a payment holiday it would be paid from this credit.
*BUT* if you want to reduce your monthly payments, you must fill out the overpayment form, and specify to use the credit to reduce payments, but in this case, you no longer have 'credit' on your accout, so you can no longer use the overpayment for a future holiday. I was surprised by this lack of flexibility, but have not yet re-confirmed with another call.
Did you set up the mortgage IBAN as a payee?
I assume you could set up a standing order from your current a/c to the mortgage IBAN.
Hi Just got a letter from PTSB that my mortgage rate will switch to 4.4% variable from the 30th June when my fixed rate of 2.2% ends. The rates on this thread show a rate of 3.8% Variable available? Is this out of date information.
My home is A2 rated and I owe €82000, the value of the property is €600000.
My home is A2 rated and I owe €82000, the value of the property is €600000.
Yes. I setup as payee. With my mortgage account in the payment reference.
I think you could do a standing order to build up your credit
I did a transfer to my actual mortgage IBAN directly and it’s sitting as an overpayment while the mortgage balance is unaffected. The agent confirms to be that the balances are netted for interest purposes.
Separately, I broke a 3 year rate that was fixed last year to go into a new 3 year on the new rates. There was a small breakage charge but I am better off within months with the saving on the new rate so a no brainer really.
Separately, I broke a 3 year rate that was fixed last year to go into a new 3 year on the new rates. There was a small breakage charge but I am better off within months with the saving on the new rate so a no brainer really.
Brendan Burgess
Founder
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- 52,502
Folks
Can we clarify this?
Is ptsb allowing capital repayments on fixed rates without a penalty?
It seems clear to me that they are not.
Can we clarify this?
Is ptsb allowing capital repayments on fixed rates without a penalty?
It seems clear to me that they are not.
Brendan Burgess
Founder
- Messages
- 52,502
If you took out a mortgage 5 years ago, and make a capital repayment now, there probably will not be a penalty because ECB rates have risen.
However, if you take out a mortgage today when the ECB rate is 4.25% and if ECB rates fall as they are expected to, then you could face a large early repayment fee.
With Avant any such early repayment fee is capped at 2% I think.
Brendan
However, if you take out a mortgage today when the ECB rate is 4.25% and if ECB rates fall as they are expected to, then you could face a large early repayment fee.
With Avant any such early repayment fee is capped at 2% I think.
Brendan
I'm guessing that would apply to regular overpayments also? I have a UB mortgage that was transferred over. We always pay the extra 10% allowed each month. I can see from my yearly statement the overpayment figure is sitting in a credit account. From what I can see from my details, the mortgage amount & term are the same though, they don't change.
From the time of moving across & clarifying a few years ago now, I was told the credit sits in an 'account' until my fixed term ends, then I can transfer it over, where it will then obviously effect the term/amount remaining.
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If you want to confirm do the maths on your interest charged on your statement. Monthly interest will be (mortgage balance - credit account) * mortgage rate / 12. I.e. lowered by your credit account balance.
I.e. your same monthly payment is paying off more of the capital each month so your term decreases.
I.e. your same monthly payment is paying off more of the capital each month so your term decreases.
Brendan Burgess
Founder
- Messages
- 52,502
Folks
There are two separate issues being discussed in this thread and it's very confusing.
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.
So if you break out of a fixed rate, they will do a calculation which might or might not result in a penalty.
When you overpay a fixed rate mortgage, you are breaking out of a fixed rate for the amount of the overpayment.
So ask ptsb. They may tell you "Hey SPC there is no break fee for you if you break out today". That does not meant that if SPC breaks out next year that there will not be a break-fee.
And in all likelihood, if you take out a fixed rate mortgage today, and break out of it early, you will be charged an early repayment fee.
2) If you overpay your mortgage with ptsb, it is treated as a credit.
This has been highlighted for some time on Askaboutmoney.
There are two separate issues being discussed in this thread and it's very confusing.
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.
So if you break out of a fixed rate, they will do a calculation which might or might not result in a penalty.
When you overpay a fixed rate mortgage, you are breaking out of a fixed rate for the amount of the overpayment.
So ask ptsb. They may tell you "Hey SPC there is no break fee for you if you break out today". That does not meant that if SPC breaks out next year that there will not be a break-fee.
And in all likelihood, if you take out a fixed rate mortgage today, and break out of it early, you will be charged an early repayment fee.
2) If you overpay your mortgage with ptsb, it is treated as a credit.
This has been highlighted for some time on Askaboutmoney.
Key Post - How overpaying a ptsb mortgage works
I was vaguely aware of this but it was brought to my attention this morning by someone who is choosing ptsb because of this facility. https://www.permanenttsb.ie/globalassets/pdf-documents/mortgages/mortgage-arrears/bmk3625..-flexible-mortgage-options-aug-19..-1.05mb.pdf In simple terms, if...
www.askaboutmoney.com
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.
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