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

When I took out my mortgage with AIB, after drawdown I tried to set up the internet banking for my mortgage so i could check the balance regularly..
I rang them and they said that there is no way to set it up that there is no online portal for a mortgage account so I would have to ring them for a statement whenever I need one. Anyway unhappy with that i when into my local branch, played dumb and said I just took out a mortgage account and id like to set up internet banking. i had all the necessary documents ready that one would need to open any bank account. 2 hours later I had internet banking with my mortgage account online. I didn't have and actual AIB current account and I didn't need one at the time. I do now ( as I want to overpay and do it soon as the break fee arrives in the door) and when to do it online- same again wouldn't let me do it kept giving an error code.. I went into branch said I have a mortgage account with you and id like to set up a current account so that I can pay my mortgage from the AIB account instead of my bank of Ireland account. Showed the lady the error code. she rang someone- when she got off the phone she just shook her head in disbelieve. she said I can do that now, but she told me they told her that I should have never been set up for internet banking for my mortgage account. She was as puzzled as I was. Then I relished banks being banks they don't want you knowing, they don't want to make it easy, they don't want to make it easy to overpay- they get less money from it. AIB break fees are usually expired by the time they arrive in the post.
So they didn't want me to have access to my mortgage account in real time, they want you in the dark. they make more more the bigger your principle is, they try discourage you by you having the ring them, go through channels and long waits.
For anyone that is an AIB customer that intends on overpaying I suggest you get set up online for your mortgage account and current account to stay a step ahead of them
 
They also don't like overpaying and then people being in breach and can't afford to pay. That leaves them in a pickle as the mortgage is non performing. That's why they like long terms (and yes they like the interest too)
 
help999 said:
For anyone that is an AIB customer that intends on overpaying I suggest you get set up online for your mortgage account and current account to stay a step ahead of them
Click to expand...
I have both current account and and mortgage account with AIB. But it's not of any extra benefit as I am not getting "break fee" letter from them. ✉️
I was with PTSB in the past and they told me the break fee on the phone and sent the letter by post within 3 days.
 
Paul F said:
@help999 If you set up an AIB current account and pay your mortgage from that account, you will get fee-free banking with AIB.
Click to expand...
That's correct.
AIB sent me a letter once we moved our mortgage to them stating that as a good gesture they are offering me fee free banking.
It's handy though!
 
Update 10.10.2022
So I contacted AIB today and told them that I haven't received the redemption figures. The agent told me it takes 5 working days to get the redemption figures and an additional 5 working days for me to get it in the post.
The agent was able to check the figures and break fee is zero.
So i came home and pulled the trigger. Made a lumpsum transfer from AIB current account to reduce monthly payments. It was an instant transfer.

Now the question is does reducing the term (years) saves more money compared to reducing monthly repayments?
 
masterboy123 said:
Now the question is does reducing the term (years) saves more money compared to reducing monthly repayments?
Click to expand...

Yes, reducing the term saves more in interest that reducing the monthly repayments.

But you could take the money you save from having lower monthly repayments and use that to make another overpayment (perhaps once every few months). That would narrow the gap in terms of interest savings between the two approaches.
 
masterboy123 said:
Update 10.10.2022
So I contacted AIB today and told them that I haven't received the redemption figures. The agent told me it takes 5 working days to get the redemption figures and an additional 5 working days for me to get it in the post.
The agent was able to check the figures and break fee is zero.
So i came home and pulled the trigger. Made a lumpsum transfer from AIB current account to reduce monthly payments. It was an instant transfer.

Now the question is does reducing the term (years) saves more money compared to reducing monthly repayments?
Click to expand...
I am going for reducing the monthly repayments. That way I am improving my cashflow and in case I would ever face dificulties the minimum patment the bank wants to see would be smaller. Also I do monthly overpayments (I assume you are on three or five years fixed with AIB) and increase them by the amount of the reduced repayments.
E.g.
Month One
Minimum mortgage repayment 1000 Overpayment 500 - total 1500

Month two
Minimum mortgage repayment 998 Overpayment 502 - total 1500

Month Three
Minimum mortgage repayment 996 overpayment 504 - total 1500.

That way you save interest and you snowball the overpayments - you reduce the monthly repayments constantly - and in the end the mortgage will be paid off earlier anyway as you increase as well the overpayments every month.

See as well

Key Post - "Overpaying my mortgage - should I reduce the term or the monthly repayment?"

This question comes up in a variety of ways and the threads often go off topic with irrelevant calculations. The interest charged each year is exactly the same - we will return to this. Reducing the repayment is simply reducing the payment you are contractually obliged to make under your...
www.askaboutmoney.com
 
Paul F said:
@help999 If you set up an AIB current account and pay your mortgage from that account, you will get fee-free banking with AIB.
Click to expand...

So, I'm 13 years into an original 25 year mortgage and have been paying off lump sums and overpaying for past few years, so I now have less than €30k left on mortgage. I expect to be able to clear the most of that in the next year. However, I'm thinking of leaving a balance of say €2k in it and request return to the original 25 year terms, so that I get to pay off maybe €10 p/m over the remainder of the term and still avail of fee free banking? Is this possible? Be great to be able to get one up on the bank under their own terms!
 
masterboy123 said:
How many working days did you wait to get the break fee letter?
Click to expand...
We got it about five days after request and only had a couple of days to return it. Luckily we had BER cert and home valuation completed so got it in the post the same day. Still waiting on acknowledgement from them though. It's been six days.
 
Mayo1969 said:
However, I'm thinking of leaving a balance of say €2k in it and request return to the original 25 year terms
Click to expand...
It's very unlikely that they will let you extend the term of your mortgage. It might take you beyond retirement age and your mortgage protection policy would also need to be adjusted.

Even ignoring those considerations, banks rarely let you extend the mortgage term.
 
Paul F said:
It's very unlikely that they will let you extend the term of your mortgage. It might take you beyond retirement age and your mortgage protection policy would also need to be adjusted.

Even ignoring those considerations, banks rarely let you extend the mortgage term.
Click to expand...

But I was just goin to see out the remaining 12 years of my original 25 year term. I'll still be finished paying off before retirement and my live insurance (actually also my residual savings in an AIB saving account) covers the outstanding mortgage capital in lieu of mortgage protection
 
Mayo1969 said:
But I was just goin to see out the remaining 12 years of my original 25 year term. I'll still be finished paying off before retirement and my live insurance (actually also my residual savings in an AIB saving account) covers the outstanding mortgage capital in lieu of mortgage protection
Click to expand...
I don't quite understand what you're trying to do.

Anyway, please start a new thread with your questions in order to keep this one on topic.
 
Merowig said:
I am going for reducing the monthly repayments. That way I am improving my cashflow and in case I would ever face dificulties the minimum patment the bank wants to see would be smaller. Also I do monthly overpayments (I assume you are on three or five years fixed with AIB) and increase them by the amount of the reduced repayments.
E.g.
Month One
Minimum mortgage repayment 1000 Overpayment 500 - total 1500

Month two
Minimum mortgage repayment 998 Overpayment 502 - total 1500

Month Three
Minimum mortgage repayment 996 overpayment 504 - total 1500.

That way you save interest and you snowball the overpayments - you reduce the monthly repayments constantly - and in the end the mortgage will be paid off earlier anyway as you increase as well the overpayments every month.

See as well

Key Post - "Overpaying my mortgage - should I reduce the term or the monthly repayment?"

This question comes up in a variety of ways and the threads often go off topic with irrelevant calculations. The interest charged each year is exactly the same - we will return to this. Reducing the repayment is simply reducing the payment you are contractually obliged to make under your...
www.askaboutmoney.com
Click to expand...
Thanks for the detailed examples.
Yes, I have 5 year fixed AIB Green Mortgage.

I want to ask you do you request the "break fee" every time you carry out an overpayment?
 
masterboy123 said:
Thanks for the detailed examples.
Yes, I have 5 year fixed AIB Green Mortgage.

I want to ask you do you request the "break fee" every time you carry out an overpayment?
Click to expand...
No I do not bother to request the break fee - I just transfer the same day they take the mortgage payment also my overpayment. Some weeks later they sent me a letter confirming the overpayment, stating that no break fee was applied and they advise next months new reduced rate. I do this now for ~ 2 years.
 
Merowig said:
No I do not bother to request the break fee - I just transfer the same day they take the mortgage payment also my overpayment. Some weeks later they sent me a letter confirming the overpayment, stating that no break fee was applied and they advise next months new reduced rate. I do this now for ~ 2 years.
Click to expand...
Wow, that's interesting and sounds good.
I am just worried if there will be a break fee if I transfer lumpsum every two months.

And does break fee vary from person to person, given if both of us are on a 5 year fixed 2.15% mortgage?
 
Read the start of this thread - because of
how Aib calculates the break fee there is none for the three year and five year mortgage as long as AIB is not decreasing the rates for their 1 year, 2 year and 4 year fixed rates. If / when AIB is changing it’s rates this needs to be rechecked.
 
Mayo1969 said:
So, I'm 13 years into an original 25 year mortgage and have been paying off lump sums and overpaying for past few years, so I now have less than €30k left on mortgage. I expect to be able to clear the most of that in the next year. However, I'm thinking of leaving a balance of say €2k in it and request return to the original 25 year terms, so that I get to pay off maybe €10 p/m over the remainder of the term and still avail of fee free banking? Is this possible? Be great to be able to get one up on the bank under their own terms!
Click to expand...

Yeah very unlikely to extend the term back to 25 years again. Maybe switching?? They might allow you to add a few years here and there but probably not going to help since you are trying to get the free banking from AIB so moving away is a moot point.

Mayo1969 said:
But I was just goin to see out the remaining 12 years of my original 25 year term. I'll still be finished paying off before retirement and my live insurance (actually also my residual savings in an AIB saving account) covers the outstanding mortgage capital in lieu of mortgage protection
Click to expand...

Yes for the remaining 12 years, you'll be grand dropping it down to a really low balance value and let it chip away for the next 11 years for example.

It reminds me of this discussion here (https://www.askaboutmoney.com/threa...account-with-no-communication-with-me.227536/)
 
Just got confirmation of our five year 2.1% with AIB. We submitted all the documents exactly one week ago we were on the 2.45 Green mortgage but requested break fee, which was zero. Still no paperwork back but the new rate appeared on the mortgage account on the app. Thanks everyone for the help and knowledge.
 
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