Original Fixed Rate Rate mortgage with AIB, half way through fixed termCould you share the wording?
And is this a former Ulster Bank mortgage, or originated with AIB?
The 'loophole' is contractual, so AIB cannot remove it.
We are writing to let you know about our new AIB Fixed Rate Mortgage Overpayment feature that will soon be available to you.
From 14 October 2023, all fixed rate mortgage customers can make payments, over the normal regular scheduled payments, up to €5,000 each calendar year for the term of the fixed rate. And we won't charge an early repayment charge (ERC) for the overpayment. If you make an overpayment in December, this needs to be paid no later than 15 December to make sure that it's processed within the current year's overpayment allowance. While we will try to process all overpayments by the end of the current year, if you make an overpayment after this date, it may be taken from the following year's allowance. Any additional overpayments above €5,000, or early full redemption of your mortgage, may result in an early repayment charge.
Advantages - An overpayment will reduce the cost of credit of your loan. Your scheduled mortgage repayments will reduce in line with the reduced balance on the account, while the remaining term and prevailing rate of interest remain unchanged.
The following example illustrates the effect of making an overpayment up to the limit, without an early repayment charge. At the time of the overpayment the mortgage balance is €200,000 on a fixed interest rate of 5.25% for a period of 5 years (60 months) and there are 25 years remaining in the term of the mortgage.
a) No overpayment - total cost of credit is €158,952.80, repayments of €1,196.52 per month
b) €5,000 overpayment is made - total cost of credit is €154,978.09, repayments of €1,166.61 per month
In the calculation above we're assuming the interest rate applied for the full mortgage term is 5.25%.
Disadvantages - There are no disadvantages of making an overpayment up to the value specified.
We recommend that you get independent financial advice before considering an overpayment on your fixed rate.
If you would like more information on the AIB Fixed Rate Overpayments allowance before you make an overpayment, please contact us on 0818 251 008 or visit aib.ie/our-products/mortgages/flexible-payment-options.
It's in addition to your contract.I got it as well.. but surely they can’t override my mortgage agreement/contract?
My guess is you’d just reduce the monthly repayment amount and everything else would remain as is.Hi all,
I've read this thread and the other related threads and I'm super confused as I'm not very knowledgeable about these financial terms so I'd appreciate some guidance.
I'm 2 years in 12 years mortgage with AIB (5 years fixed, green mortgage, 2.15% interest rate).
If I understand correctly, I can now overpay lumpsum 5K without early repayment fee (new AIB mortgage feature). And I can even overpay more than that because my interest rate is lower than the current rates. Is this correct?
If so, is there not an upper limit? I may as well just overpay the whole of remaining credit if I have the money. Would that not cause breakage fee?
If all of the above is fine, then, do I just transfer on the app/Internet banking? I added my mortgage account but I'm scared making 5K or more overpayment would reduce term and break my fixed term rate.
I'd appreciate any guidance. Thanks
I'm scared making 5K or more overpayment would reduce term and break my fixed term rate.
I'd appreciate any guidance. Thanks
This is a very good rate, so good in fact it is likely to be more advantageous to save any overpayment than to overpay.I'm 2 years in 12 years mortgage with AIB (5 years fixed, green mortgage, 2.15% interest rate).
How much are you throwing in? Since September 2023, AIB allow you to overpay by 5K per calendar year. Transfer 5K in now today and 5K in two days later. That's 10K sorted without even considering any fees.Hi all,
I can't find the old thread where we discussed "break fee".
Basically, I have a 5-year fixed AIB Green mortgage at 2.15%. I am in year three of five.
I have a lump sum that I want to transfer from my current AIB account.
Will there be a break fee?
Thank you
There won't be a break fee because of how AIB use an additional method for calculating the ERC as outlined at the beginning of the threadHi all,
I can't find the old thread where we discussed "break fee".
Basically, I have a 5-year fixed AIB Green mortgage at 2.15%. I am in year three of five.
I have a lump sum that I want to transfer from my current AIB account.
Will there be a break fee?
Thank you
Oh wow, I have only a day left.How much are you throwing in? Since September 2023, AIB allow you to overpay by 5K per calendar year. Transfer 5K in now today and 5K in two days later. That's 10K sorted without even considering any fees.
View attachment 9869
Thanks so much, as always.There won't be a break fee because of how AIB use an additional method for calculating the ERC as outlined at the beginning of the thread
Your rate of 2.15% is lower than anything on offer currently so it will definitely be zero break fee
However if you have any doubts, it is very easy to request an ERC from AIB for the amount that you want to overpay.
If you haven't made any overpayment in 2024, I can't see any issue to transfer 5K today.The last overpayment I made was on 2 October 2023. I guess just before the limit of €5000 came into effect.
So I am stuck now and worried if I pay €5000 today, they may pose a fine of €2000 or something...
I have made the payment now.If you haven't made any overpayment in 2024, I can't see any issue to transfer 5K today.
You are over complicating what is very so straightforward. There would never be a 40% penalty on an overpayment.So I am stuck now and worried if I pay €5000 today, they may pose a fine of €2000 or something...
That's most helpful.You are over complicating what is very so straightforward. There would never be a 40% penalty on an overpayment.
What @BigPineapple highlighted is a separate condition of AIB where everyone on any fixed rate can pay €5k per year with no penalty. Anything above that may incur a fee.
But in your very specific circumstances of having fixed on the 5 year rate at 2.15% , AIB's calculation method for the ERC will mean you definitely won't have an ERC. It's really that simple
That's most helpful.
I have made a payment of €5K today. I wanted to overpay €10K but will delay the extra €5K to 2025, in line with the new condition.
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