Overpaying the mortgage

NoseyMike2010

Is it possible to get a mortage here that allows you to overpay if you have money at the end of the month??

I mean if my mortage was 700E and I had a spare 100E could I use this 100E to pay off some of the principle. Help greatly welcomed.

NoseyMike2010

solerina

I am not an expert but I remember Eddie Hobbs saying that its one of the best kept secrets in banking that you can pay more than they are obliged too..he says it can knock years off your repayments if you do it often enough

NoseyMike2010

The thing is it does knock loads off your mortage. Do banks allow overpayments I wonder.

kenco

NoseyMike2010 wrote: »

Is it possible to get a mortage here that allows you to overpay if you have money at the end of the month??

I mean if my mortage was 700E and I had a spare 100E could I use this 100E to pay off some of the principle. Help greatly welcomed.

NoseyMike2010

Yes you can pretty much do it on any mortgage just make sure the overpayment goes against the capital and does not sit idle. Well worth doing if you can as in time it reduces tou term and also if you ever needed to take a mortgage break you can without hassle. As some other posters have said it's not broadcast by the banks as it's not in their interest but depending on what rate your mortgage is at it beats a 3% deposit rate hands down. Finally in theory if you over paid say 5k half way through a 30 year mortgage then you can actually withdrew it if stuck!

Dirk Gently

how do you go about this. Is it just a case of transferring a few blips into the banks mortgage account every now and again or do you have to go down and let them know everytime you want to put some money in outside of the normal monthly direct debit?

Mad Benny

Call your bank/building society. They will be delighted to get the cash. You generally can't do this if you are on a fixed rate mortgage. If you are lucky enough to be on a tracker you can usually get better interest on deposit so would be better to save it and then lump in it when interest rates change.

Avns1s

There is no bother doing it at all. You can either make a payment now and again to your mortgage account or you can set up a standing order for a set amount every month.

I don't know about being able to "withdraw" it in the future. Generally, any of these payments are irrevokable but I would say, if you got into difficulties down the road with your mortgage you would be able to take a "payment holiday" on the basis of being ahead with the payments.

Taking low interest on deposits and DIRT tax into account, it makes sense to pay a bit extra off the mortgage if you can. Have a look here to see what effect it might have.

Joey the lips

Make sure its going off the principle seen as though its a payment above the agreement.

Otherwise you are just giving banks early christmas presents.

Dirk Gently

Mad Benny wrote: »

You generally can't do this if you are on a fixed rate mortgage.

Thats what I thought but the posts above got me a bit excited, particularly this....

Yes you can pretty much do it on any mortgage

astrofool

Ask your lender, KBC, for example, allow you to pay off 10% extra of a fixed rate mortgage during the fixed term. They also allow you to draw it back out if you need it at a later date.

Victor

Be careful to keep some money for a rainy day (OK, yes, we are snowed in and the IMF are here, but it can get worse ).

m5ex9oqjawdg2i

solerina wrote: »

I am not an expert but I remember Eddie Hobbs saying that its one of the best kept secrets in banking that you can pay more than they are obliged too..he says it can knock years off your repayments if you do it often enough

Best kept secret? It's hardly a secret at all so no idea where you are getting that one from.

Blackjack

Axton White Crossbow wrote: »

Best kept secret? It's hardly a secret at all so no idea where you are getting that one from.

Hardly qualifies a "well kept secret". Eddie Hobbs is a Twat - he was just using this to make it sound like he knew stuff others didn't. He did know stuff, but only because people weren't bothered to actually read stuff for themselves. Anyone who bothered to spend a short period of time doing any research could be easily as knowledgeable as Hobbs by just using the Internet.

All of this is outlined in Mortgage terms and conditions, and usually available on Mortgage providers websites.

johnnyskeleton

If it is a fixed term, you can make overpayments, but it won't make any difference to you because you will still have to pay the full amount of interest. Better to keep it in a high interest savings account until the fixed period is up then transfer the entire savings account over.

Also note that if you have a tracker at the moment, you probably get a better interest rate on a savings account than from paying off the mortgage. If you are disciplined enough to keep a savings account that you won't touch, this is a more sensible option.

kenco wrote: »

Finally in theory if you over paid say 5k half way through a 30 year mortgage then you can actually withdrew it if stuck!

I don't think you can. Once it is capitalised, you will need to get an equity release from the bank to withdraw it again (unless agreed with them).

I'm not sure if any Irish banks offer an offset mortgage anymore, but if they do this is the ideal account to overpay into with the option of withdrawing if stuck.

clown bag wrote: »

how do you go about this. Is it just a case of transferring a few blips into the banks mortgage account every now and again or do you have to go down and let them know everytime you want to put some money in outside of the normal monthly direct debit?

Go into a branch and ask or ring telephone banking. Most banks will allow you to transfer it on the internet but you need to follow it up with the bank over the telephone to ensure that the overpayment is actually capitalised. You can also arrange a fixed overpayment by standing order, speak to the branch, telephone banking to arrange same.

astrofool

johnnyskeleton wrote: »

If it is a fixed term, you can make overpayments, but it won't make any difference to you because you will still have to pay the full amount of interest. Better to keep it in a high interest savings account until the fixed period is up then transfer the entire savings account over.

I don't think you can. Once it is capitalised, you will need to get an equity release from the bank to withdraw it again (unless agreed with them).

I'm not sure if any Irish banks offer an offset mortgage anymore, but if they do this is the ideal account to overpay into with the option of withdrawing if stuck.

On these points, KBC offer a mortgage that allows you to pay extra off a fixed mortgage (reducing interest) and equity release on demand for the overpayment amount (24 hour notice).

NoseyMike2010

What rates have first time buyers been offered at the moment??