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

I recently switched to the AIB fixed 5 year green mortgage at 2.1%. And it seems clear from info in this thread that I can overpay as long as my rate is lower that their other products under 5 years.

I called up AIB to ask about how I can make regular overpayments and if I could just create a standing order to the mortgage account (from PTSB). The chap I was speaking to said no. He said that I'd need to call each time, tell them the amount I want to overpay by and then they'll send me a letter within 5 working days indicating break fee. Then I can decide to pay or not.

Is this info correct? I thought I had read in here before that someone had set up a standing order to the mortgage account. But as per above, AIB told me this isn't possible. So just curious as to how people are handling regular overpayments to AIB on a fixed rate.

Thanks.
 
Lecoqdiesel said:
Is this info correct?
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It's not technically correct but from AIB's perspective, that is their policy to ensure customers don't get hit with unexpected charges. It is a broader policy covering all fixed mortgage rates, some of which would incur a break fee.

But from your own perspective, you know you won't face a break fee as outlined in this thread so you don't have to worry about it. There is nothing stopping you setting up that standing order but AIB won't recommend it to you because they can't guarantee it.

I can't say I remember seeing anyone actually set up a standing order but @Merowig has been making regular overpayments for 2+ years.

I myself have made 3 irregular overpayments so far. For the first, we requested the break fee because it was a bigger lumpsum but the other two since then, I have just transferred between accounts in the app which is all of 30 seconds to do. A week or so later, you will get a letter with updated details and a confirmation of the break fee (zero)
 
Do they keep the fixed rate you were at? They just reduce your monthly payment then?
 
Yes, the default option which happens when you transfer money to your mortgage account is the rate stays the same, the term remains the same, the monthly repayment reduces

Have made about 6 overpayments this year, requested a breakage fee for the first one but not afterwards. Never had a fee
 
_OkGo_ said:
It's not technically correct but from AIB's perspective, that is their policy to ensure customers don't get hit with unexpected charges. It is a broader policy covering all fixed mortgage rates, some of which would incur a break fee.

But from your own perspective, you know you won't face a break fee as outlined in this thread so you don't have to worry about it. There is nothing stopping you setting up that standing order but AIB won't recommend it to you because they can't guarantee it.

I can't say I remember seeing anyone actually set up a standing order but @Merowig has been making regular overpayments for 2+ years.

I myself have made 3 irregular overpayments so far. For the first, we requested the break fee because it was a bigger lumpsum but the other two since then, I have just transferred between accounts in the app which is all of 30 seconds to do. A week or so later, you will get a letter with updated details and a confirmation of the break fee (zero)
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Thanks for the info. I think I might just go their preferred route for the first payment. And then just set up a standing order from my PTSB current account to the AIB mortgage account and continue until they send me a letter with a breakage fee.

When you say they can't guarantee it, you're referring the break fee, is it? I assume any standing order I create against my mortgage account will arrive successfully and reduce the capital. And they can sort out whether I owe any break fee. For which I should not based on present circumstances.

Also I think I may be thinking of another thread that referenced this one. Pretty sure I read that someone had a standing order set up from a 3rd party account and have been leaving as is until notified about break fee.
 
Lecoqdiesel said:
I think I might just go their preferred route for the first payment
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Yes, I'd agree. Always safer to test the waters first

Lecoqdiesel said:
When you say they can't guarantee it, you're referring the break fee, is it?
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Yes sorry, I meant they can't guarantee the break fee always being zero. But you know based this thread that you have a rate of 2.1% and all of the relevant rates are now 3.1% or greater with AIB so you can be extremely confident that you won't face any break fee

Lecoqdiesel said:
assume any standing order I create against my mortgage account will arrive successfully and reduce the capital. And they can sort out whether I owe any break fee
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Yes this is what should happen. Your mortgage has an account number, sort code and iban so there is nothing stopping you setting up the standing order. You could even try it as a once off payment first of €100 and wait till you receive the update in the post
 
I called AIB before Christmas break requesting overpayment break up fee. Letter arrived after 5 working days (probably postal delay due to Christmas rush) with zero break up fee. However, it also included a form with options to choose new mortgage rates but no option to keep current rate. I was very clear over the phone that I am not looking to break-up existing fixed rate and yet they sent a form requesting to choose new mortgage rates. Is it a standard practice ?
 
bish123 said:
I called AIB before Christmas break requesting overpayment break up fee. Letter arrived after 5 working days (probably postal delay due to Christmas rush) with zero break up fee. However, it also included a form with options to choose new mortgage rates but no option to keep current rate. I was very clear over the phone that I am not looking to break-up existing fixed rate and yet they sent a form requesting to choose new mortgage rates. Is it a standard practice ?
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It sounds like they should have sent you this form:

But in reality you don't need to complete the form – you just need to transfer the overpayment amount from your current account to your mortgage account. You can do it via online banking.

Making an overpayment will not cause you to lose your current fixed interest rate.
 
bish123 said:
I called AIB before Christmas break requesting overpayment break up fee. Letter arrived after 5 working days (probably postal delay due to Christmas rush) with zero break up fee. However, it also included a form with options to choose new mortgage rates but no option to keep current rate. I was very clear over the phone that I am not looking to break-up existing fixed rate and yet they sent a form requesting to choose new mortgage rates. Is it a standard practice ?
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That does seem to be the 'standard'. But as @Paul F said, you are not interested in changing the term or details of your fixed rate.

You just needed confirmation of the break fee and now you can make the transfer. You don't actually need to sign or send anything else back if you make the payment yourself
 
bish123 said:
I called AIB before Christmas break requesting overpayment break up fee. Letter arrived after 5 working days (probably postal delay due to Christmas rush) with zero break up fee. However, it also included a form with options to choose new mortgage rates but no option to keep current rate. I was very clear over the phone that I am not looking to break-up existing fixed rate and yet they sent a form requesting to choose new mortgage rates. Is it a standard practice ?
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I can only assume the word "break" means different thing to bank or that the person you spoke to interpret it incorrectly.


AIB call it "Early Repayment Charge".

EARLY REPAYMENT CHARGE​

When will you have to pay an early repayment charge (ERC)?​

At any time when a fixed interest rate (fixed for a period of at least 1 year) applies to your mortgage loan, you may have to pay us an early repayment charge if you; (i) repay all or part of your mortgage loan early, (ii) make an out of course repayment, or (iii) convert the interest rate on your loan to another interest rate. Any or all of these instances may result in a cost to the bank.
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Link: https://aib.ie/our-products/mortgages/Home-Mortgages-Regulatory-Information
 
On a somewhat related note (to AIB mortgages) for AIB current account holder.

For any one with a split mortgage (i.e. maybe you have a fixed portion and a variable portion initially [It was in my case but both fixed now]).

You can pay one portion out of your own account and the other out of your spouse's account. Both of you can enjoy free banking.
 
Sorry if this question has already been answered but I haven't seen it mentioned

I've just taken out a mortgage with AIB on the 5yr Green Fixed rate @ 2.65% (missed old rate by 2 weeks :( )
We were hoping to overpay as soon as the fixed rate ended before fixing again but after stumbling upon this thread it seems like I may be able to sooner. Does the old rule still apply for the new 2.65% rate in that there will be no ERC if you overpay? I think their rates went up .5% across the board (and a further .5% since) so I'm hoping we can still overpay without charge. Also - can I start this immediately or do I have to wait until some time has passed before?
 
_OkGo_ said:
It's not technically correct but from AIB's perspective, that is their policy to ensure customers don't get hit with unexpected charges. It is a broader policy covering all fixed mortgage rates, some of which would incur a break fee.

But from your own perspective, you know you won't face a break fee as outlined in this thread so you don't have to worry about it. There is nothing stopping you setting up that standing order but AIB won't recommend it to you because they can't guarantee it.

I can't say I remember seeing anyone actually set up a standing order but @Merowig has been making regular overpayments for 2+ years.

I myself have made 3 irregular overpayments so far. For the first, we requested the break fee because it was a bigger lumpsum but the other two since then, I have just transferred between accounts in the app which is all of 30 seconds to do. A week or so later, you will get a letter with updated details and a confirmation of the break fee (zero)
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I do not have a standing order as I increase the amount I overpay every month slightly. But nothing can stop you to just do the standing order @Lecoqdiesel .
As oKGo mentioned AIB recommends against that but they do that to cover all their corners.
 
cupan-tae said:
Sorry if this question has already been answered but I haven't seen it mentioned

I've just taken out a mortgage with AIB on the 5yr Green Fixed rate @ 2.65% (missed old rate by 2 weeks :( )
We were hoping to overpay as soon as the fixed rate ended before fixing again but after stumbling upon this thread it seems like I may be able to sooner. Does the old rule still apply for the new 2.65% rate in that there will be no ERC if you overpay? I think their rates went up .5% across the board (and a further .5% since) so I'm hoping we can still overpay without charge. Also - can I start this immediately or do I have to wait until some time has passed before?
Click to expand...
Wondering how you got on with this? Are you able to pay off during your 5 year fixed term? I am on the older rate of 2.1% since last summer. Rang AIB and they said if I transfer additional money to mortgage account online I would lose my rate and have to re-fix at the new current Green Mortgage rate of 3.1% :( so looks like I can't overpay in any way without giving up my rate
 
DubMark said:
Wondering how you got on with this? Are you able to pay off during your 5 year fixed term? I am on the older rate of 2.1% since last summer. Rang AIB and they said if I transfer additional money to mortgage account online I would lose my rate and have to re-fix at the new current Green Mortgage rate of 3.1% :( so looks like I can't overpay in any way without giving up my rate
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That doesn't sound right at all at all

I and others here have been regularly overpaying through online banking as you describe without having to break from our rate

I think the person you spoke to either misunderstood your query or was poorly informed
 
BongoBangoBingo said:
That doesn't sound right at all at all

I and others here have been regularly overpaying through online banking as you describe without having to break from our rate

I think the person you spoke to either misunderstood your query or was poorly informed
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Cheers for getting back to me. Perhaps I went about it the wrong way?! I called them up and explained I am on a fixed rate since last summer and I want to transfer money into the account online. I was told there could be a break fee and they would check. Popped me on hold and then came back and said that if I transferred money it it would break me out of fixed rate and I would need to re-fix even though I have over 4 years left on the term! And the re-fix would be at current rates - ffs!

Will read back over this thread again to see if I missed something - perhaps I should just ask for the break fee letter first as others did?

Perhaps I just got the wrong person on phone and will try again!
 
I think what probably isn't helping is the conflation of 'overpaying' and 'breaking/fixing'

You want to overpay on your fixed rate mortgage, this does not require you to break your current rate and/or fix at another rate

What an overpayment does entail is an Early Repayment Charge. This is detailed in the fine print of your mortgage https://aib.ie/content/dam/aib/personal/docs/our-products/mortgages/mortgage-amendment-form.pdf

I think the best thing to do is email AIB and request an ERC quote for an overpayment of €X. If you speak on the phone to them instead I would make it clear that you want an ERC quote, don't entertain talk of breaking or fixing
 
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