Perm TSB Mortgage - Not straightforward to increase Mortgage Repayments

B

Ben

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I contacted Permanent TSB this morning to arrange overpayments on my mortgage. Not something that can be arranged on the phone, they are sending me out a 'Flexible Options' form to complete. Fair enough.
However, I asked if the overpayment would be offset against the capital and they said that the payments would be held in reserve on the account. They said that this would have the same effect in reducing my interest bill. The overpayments will simply accumulate in the account until I make a phonecall to them requesting that the amount be offset against the capital. Apparently €1500 would be the minimum amount that they would offset.
Does this make sense??? Do I really have to keep ringing them every couple of months to 'activate' the overpayment? What am I losing out on and what are they gaining by this???
 
What interest do you get on this 'account' as it builds to €1500 ,

If its the same as the mortgage rate at all times ...and if no DIRT is charged on it .....then you are OK in effect .
 
Thanks for the response 2Pack.
I rang my local branch this morning to speak to a mortgage advisor.
The information I was previously given came from an advisor on their telephone banking system.

Anyway, he was bewildered by the information I was given. His understanding was that I fill in the form, send a cover letter instructing my over-payments to be deducted directly from the capital and hey presto - job done.
He even suggested that I ring back the telephone banking service and ask to speak to a supervisor to clarify. I hardly think that my request was so rare that mis-information could be provided. I am not going to contact a 3rd person on this. I will follow his instructions on the form and the letter and see how I get on.
 
It was a lot more straightforward for me with EBS years ago - I just increased the monthly repayments above the "normal" level dictated by the capital sum, rate and term and the excess went against capital immediately. I also did lump sum repayments of arbitrary amounts along the way. However I guess it depends on the terms & conditions of your specific loan agreement. On the other hand, under the Consumer Credit Act, no lender can penalise/charge an owner occupier for making capital repayments off a variable rate mortgage on their PPR.
 
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