Ulster Bank 10% overpayment option?

RedOnion said:

That's what I would have thought also, as the new fix is a separate agreement. It's a while since I read one of their contracts though to see where exactly the 10% is.

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This is what I thought too but it appears not to be the case from talking to them multiple times.

My understanding is the 10% is based on the outstanding amount at the start of the calendar year, even if you fix later in the year. Also the 10% limit applies across two fixed terms. So if you finish a fixed term in June and have already paid of 8% of the January balance, you have capacity to pay 2% of the January balance in the rest of the year, not 10% of the June balance.

It is not intuitive to me but I spoke to two different people and they were both clear in giving the same message. The figures I got in the second call also matched this.

SPC100 said:

I'm a bit unclear on whether a refix gives you another opportunity.

E.g. last week, you overpayed 10p.c. (of the value of the mortgage on jan-01). This week you re-fixed. I guess next week you can then pay ten percent of the balance (as of date of fixing).

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Wiresandmore said:

you have an allowance of 10% overpayment per year - so if you re-fix mid-year onto a new rate, you can’t get a 20% opportunity, it’s 10% per customer on a fix rate per calendar year.

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abc_xyz said:

My understanding is the 10% is based on the outstanding amount at the start of the calendar year, even if you fix later in the year. Also the 10% limit applies across two fixed terms. So if you finish a fixed term in June and have already paid of 8% of the January balance, you have capacity to pay 2% of the January balance in the rest of the year, not 10% of the June balance.

It is not intuitive to me but I spoke to two different people and they were both clear in giving the same message. The figures I got in the second call also matched this.

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Thanks to both of you for confirming this!

I’ll ask the question again…why not repay the 10%, repay what you want the day you move off the fixed rate, and then refix the following day?

Gordon Gekko said:

I’ll ask the question again…why not repay the 10%, repay what you want the day you move off the fixed rate, and then refix the following day?

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There is no issue with this. It will however take a few days (or maybe a week or two) from a practical perspective, ie paperwork, requesting the money to be paid and getting it applied, refining, etc.

Gordon Gekko said:

I’ll ask the question again…why not repay the 10%, repay what you want the day you move off the fixed rate, and then refix the following day?

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I believe the overall idea would work but it is not as quick as pay one day and refix the following day.
Once you make the payment you have to wait for it to be processed and to come of the mortgage while it is a variable rate. That takes about 5-10 working days in my experience, based on when I overpaid on my fixed rate. Then you have to send a letter in to UB to say you want to go back to a fixed rate and wait for that to take effect - there either isn't an online option for this or I didn't ask, I can't remember which.
So overall you'll be on the variable rate for 2-4 weeks, and probably closer to 4 than 2.