Ulsterbank overpayment advice

005404

Registered User
Messages
23
Hi all, please assist me if you can and thanks in advance for any help.

I made maximum overpayment to UB allowable for 2020 at start of March reducing term with the payment. I forgot to ask and hence this question if my repayments stay same for rest of the year am I technically overpaying the 10% as the max allowance was reached at point of payment so by in theory overpaying on the new balance for remaining year or does my mortgage get reduced for remainder of 2020 to not allow any further overpayment.Do UB factor this into my allowable overpayment for the year. Thanks in advance.
 
I've read your post twice and I don't understand your question.

After you made the lump sum repayment, UB should have sent you a letter with new repayment amount and term. That's your new repayment amount (should be the same as old repayment amount). You pay that amount, no issues.

Is that the question?
 
You mention that you have reduced the term on your mortgage. Did you explicitly ask Ulster to reduce the term? If your term has reduced there may not be any implicit overpayments as the recalculation of your term would be a function of your existing monthly payment amount. I.e., On a mortgage of €200k, 240 months left @ 2.6% a borrower would repay €1070 per month. If they overpaid 10% (€20k) the monthly repayment would fall to €963 OR the term would be reduced by about 30 months.

The above is how the mechanics of the calculations should work being in a fixed mortgage complicates it slightly. In the case of Ulster Bank your monthly repayment will not change. You will in effect continue to implicitly overpay your mortgage. In essence everything is "fixed" in an Ulster Bank fixed mortgage bar the outstanding balance.

I don't believe your actions will trigger a potential early repayment fee. It would be a bit rich of Ulster to offer fee free overpayment only to snare you on the monthly repayments. I asked this over the phone, though I'm not sure the nice Scot on the otherside grasped the question fully, they seemed adamant the implicit overpayment would not trigger a overpayment fee calc. Likewise I've never heard or seen anyone on here raising an issue of being charged in such circumstances.
 
You mention that you have reduced the term on your mortgage. Did you explicitly ask Ulster to reduce the term? If your term has reduced there may not be any implicit overpayments as the recalculation of your term would be a function of your existing monthly payment amount. I.e., On a mortgage of €200k, 240 months left @ 2.6% a borrower would repay €1070 per month. If they overpaid 10% (€20k) the monthly repayment would fall to €963 OR the term would be reduced by about 30 months.

The above is how the mechanics of the calculations should work being in a fixed mortgage complicates it slightly. In the case of Ulster Bank your monthly repayment will not change. You will in effect continue to implicitly overpay your mortgage. In essence everything is "fixed" in an Ulster Bank fixed mortgage bar the outstanding balance.

I don't believe your actions will trigger a potential early repayment fee. It would be a bit rich of Ulster to offer fee free overpayment only to snare you on the monthly repayments. I asked this over the phone, though I'm not sure the nice Scot on the otherside grasped the question fully, they seemed adamant the implicit overpayment would not trigger a overpayment fee calc. Likewise I've never heard or seen anyone on here raising an issue of being charged in such circumstances.

Yes I asked to reduce term.
Yes this is my question. Will my monthly payment for remainder of 2020 stay the same which in effect increases my overpayment to over 10%. Or will Ulsterbank reduce my payment until december as max allowance reached at date of overpayment?

If nothing is changed with payment I would hope to max this out by overpaying on the 2nd January 2021 to max out overpayment ie 10% plus 12 x monthly overpayment and % gained monthly.

Thanks for help
 
Because you have requested that they reduce the term, that means that you are no longer "overpaying", you are paying over a shorter term, your repayment is higher than it was.

I always request they keep the term the same. I overpay monthly, but because I have kept the original term of the loan, it means that if I need to reduce the repayment at any point, I can simply adjust my overpayment, I don't have to request any term extension. Every year they recalculate my repayment based on the remaining term, so the repayment drops, I then adjust the repayment to return to the level it was at. So I will still pay it off ahead of schedule but if I need the flexibility, I can avail of it myself.
 
Last edited:
Every year they recalculate my repayment based on the remaining term, so the repayment drops, I then adjust the repayment to return to the level it was at. So I will still pay it off ahead of schedule but if I need the flexibility, I can avail of it myself.


Can I ask if you're with Ulster bank? From my experience they have never adjusted my repayment at any point and I'm 23 months into a fixed mortgage and regularly overpay..... Now I'm all excited to see what happens next month ;-)
 
I am with Ulsterbank, yes, however I am not on a fixed rate so it is likely there is a difference in how they operate in practice.
 
Back
Top