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

Thanks for the above information. I will look into the complaint then as that is the information I received from the bank both in person and on the phone support.
 
First of all, fantastic thread.

Can you help clarify something for me so I can get my head around it before I take action.

I have split mortgage with AIB (LTV <50%). One with 45K left (Just fixed for 3 years @ 2.35% in May 2022 due to concern with interest rate hike in the next year or two) and the other is 48K (Fixed for 3 years @ 2.35% in Dec 2020, so another 1.5 years to run approximately).

Having just read this opening post and the other link that was shared. The thought never crossed my mind that overpaying on fix rate does not mean breaking the fixed contract and having to reset/start again, rather as _OkGo_ said it is merely paying the charge (where applicable). This was one of the reason I didn't go for the 5 years Green rate in the first place.


So my questions are:

1. If I break my two fixed contract and re-fix the using the 5 years Green, my breakage will be zero as worked out below?

Fix 1: (A) X (U) X (D %) = € ERC = (45,000) X (36/12) X (2.35%-2.35%) = Zero
Fix 2: (A) X (U) X (D %) = € ERC = (48,000) X (18/12) X (2.35%-2.95%) = Zero

*2.95% obtained from AIB current rate for LTV <50% for 1 year and 2 years due to 18 months falling in between (Whichever is the most beneficial. In this case both are the same)


2. Do I need to request a breakage cost on the phone first before sending in the amendment form or do people just work out what the break down is an just send in the form directly? (If it takes a few weeks to get the letter and then process my new request form, the interest rate may have changed during that time which is why I'm asking). Sound like _OkGo_ you just sent it in from your post yesterday without the need to engage with AIB.


3. It was mentioned for overpayment, the ERC is to be requested from AIB from the example. Do we need to wait for the letter to come before sending in the Overpayment form?? Or is that just a formality to check that there is indeed no charge before making the Overpayment request?
 
@BigPineapple

1. Your break fee should be zero as you have calculated it

2. To clarify, I did request a break fee over the phone to confirm it was zero and I also waited for the letter to arrive which was about 6/7 working days. I wasn't too concerned that the rate would rise that quickly so I waited. However while on the phone, I was told that I could ring AIB 3/4 days later to get confirmation over the phone.

It's up to you really, everything should be zero but it is also nice to have it confirmed before proceeding. If you ring today to request your break fee, you should be able to ring back by Thursday to get confirmation over the phone

3. Similarly with the overpayments, it is more of a formality to request ERC once you are confident that the ERC will be zero. You can complete the overpayment form or you can make a payment directly to your mortgage account through online banking. I can't find it right now but other posters have suggested that the default action of making the payment online is to reduce the monthly payment & maintain the term
 
Thank you _OkGo_ it really help put my mind at ease.

Break fee request there this morning, just need to sit and wait in the meantime
 
It was actually @BigPineapple themselves that said that in this post
 
Paul F said:
It was actually @BigPineapple themselves that said that in this post
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Yes overpayment via app is easy to do (For Variable, never tried with respect to Fixed because I always thought there would be a penalty).

I was more concerned about ERC side since I never knew about the AIB rate oddity, the formula and how the stars aligned to give a perfect scenario with the best of both worlds (Lowest rate and overpayment without penalty).

Had I known that I would have switched to fixed long time ago (Wasted slightly over a year at 2.75% instead of 2.15%).

Ahh well, better late than never, now I just need to beat it before they change the rate.
 
Sorry if this has already been covered, I've read loads of threads here and I can't seem to find the answer, even though it has probably been staring me in the face...

If you're not eligible for the fixed AIB Green mortgage rate, can that rate still be used in the calculation of overpayment breakage fees on another, non green, AIB fixed rate mortgage?
 
I have wondered the same thing myself and I don't think it is possible to tell based on what AIB have published about their break fee calculation methodology.
 
Paul F said:
I have wondered the same thing myself and I don't think it is possible to tell based on what AIB have published about their break fee calculation methodology.
Click to expand...
Thanks Paul, glad to know it's not just me wondering. Best to take account of it in the calculations, just in case (I'm switching to an AIB fixed rate from variable but planning to make some occasional overpayments).
 
Not an answer to anyone's question but we are having awful problems with the bank at the minute. We broke out of our 5 year rate and made an overpayment. Money came out of our account on the 24th of May and even though I submitted the ammendment forms on the 15th of May they have not refixed our mortgage. 2 complaints later and numerous phone calls and still nothing. Just been informed today that it should be sorted next week but not holding my breath. Also our quarterly interest is due to be charged tomorrow and will now be charged at variable rate (2.75%) rather than fixed of 2.35%. Really annoyed with the whole process at this stage.
 
That sounds a bit rubbish, to keep it polite.

So are you saying that if you're on a fixed rate with AIB you need to get clearance to make the overpayment before making the actual payment?
 

If you don't get a satisfactory outcome via the complaint with AIB then refer to the Ombudsman once you have got a final response.
 
FrankJnr said:
That sounds a bit rubbish, to keep it polite.

So are you saying that if you're on a fixed rate with AIB you need to get clearance to make the overpayment before making the actual payment?
Click to expand...
We wanted to use the overpayment to reduce the term not the monthly repayments so the bank made us do it this way. I made the initial enquiry about it on the 8th of April. They sent me the wrong information firstly so it took over a month to even make the over payment and now it has been almost another month and its still not sorted. I have been keeping it very polite with the people on the phone but the whole process is driving me bananas. I made an official complaint on the 3rd of June and was told the bank would contact me within 5 working days to deal with it and so far I've heard nothing so I made another one yesterday.
 
TRS30 said:
If you don't get a satisfactory outcome via the complaint with AIB then refer to the Ombudsman once you have got a final response.
Click to expand...
I will be getting on to them. It's over 2 months since I started the initial process and still not sorted. And now we will have to pay more interest. Totally unacceptable.
 
That's what I intend doing, reduce the variable portion at the end of the fixed portion.

Fingers crossed for you!
 
Cathbarr said:
I will be getting on to them. It's over 2 months since I started the initial process and still not sorted. And now we will have to pay more interest. Totally unacceptable.
Click to expand...

As you should. You just need to have a final response from AIB before you go to the Ombudsman, as that is the firs thing they will ask you.
 
TRS30 said:
As you should. You just need to have a final response from AIB before you go to the Ombudsman, as that is the firs thing they will ask you.
Click to expand...
So much for it taking 10 working days to get it all sorted as I was told in early May.

I pity anyone trying to apply for a mortgage or draw down funds at the moment.
 

I think you can, see the first part in red below says "the applicable interest rate offered by the bank at the time the mortgage load is repaid or converted". It then point you to note 3 and Note 3 says they will use the one that generate the lower ERC if there is more than one applicable fixed rate. That would be my read of it.


but how would that work for you?? I can only see two combinations:

1. 5 years green and 5 years LTV
OR
2. 4 year high value and 4 years LTV

Both kinda need to be higher than 5 years to begin with, so you only have 7 years LTV or 10 years LTV as option to choose from.
But 7 years LTV or 10 years LTV are both higher than them.

So the figure will be higher rate minus lower rate, meaning you still have to pay a charge based on the formula, no?



Reference: https://aib.ie/our-products/mortgages/Home-Mortgages-Regulatory-Information
 
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