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Mortgage Overpayment?

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  • 19-02-2013 4:01pm
    #1
    RAFA B
    Registered Users Posts: 132 ✭✭



    Have a tracker mortgage with UB and am wondering aboutoverpayments. Outstanding balance off€105,000. Monthly works out €380 and amlooking to overpay by €200. Before icontact them anyone any advice? Willthey allow me to overpay being on a tracker? Is it worth it for €200 pm?



    Thanks


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    #2
    Citizenpain
    Registered Users Posts: 1,939 ✭✭✭Citizenpain


    RAFA B wrote: »

    Have a tracker mortgage with UB and am wondering aboutoverpayments. Outstanding balance off€105,000. Monthly works out €380 and amlooking to overpay by €200. Before icontact them anyone any advice? Willthey allow me to overpay being on a tracker? Is it worth it for €200 pm?



    Thanks
    Can you save 200/mth at a higher interest rate?


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    #3
    NIMAN
    Registered Users Posts: 33,613 ✭✭✭✭NIMAN


    afaik you can only overpay on a standard variable mortgage.


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    #4
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    NIMAN wrote: »
    afaik you can only overpay on a standard variable mortgage.

    thats not correct. I cant speak for all trackers but certainly on an AIB tracker you can overpay


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    #5
    cmssjone
    Registered Users Posts: 355 ✭✭cmssjone


    You can generally overpay on a tracker mortgage but you will need to check your T & Cs.

    Rule of thumb whether or not to overpay as far as I'm concerned is as follows:

    If you can find a savings rate that pays more than your mortgage rate (don't forget to factor in DIRT) then invest your money here.

    Once your mortgage rate exceeds the savings rate then this is the time to change over to overpayments.

    NB: Once you get to the stage that mortgage rate > savings rate, don't forget to take a lump sum off your mortgage principal with the money you have accrued in your saving account.

    Good luck


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    #6
    NIMAN
    Registered Users Posts: 33,613 ✭✭✭✭NIMAN


    D3PO wrote: »
    thats not correct. I cant speak for all trackers but certainly on an AIB tracker you can overpay


    Apologies then:o

    I used to have an AIB Tracker and once asked about overpaying and was told "you can't overpay on a tracker".

    Must have been just theirs.


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    #7
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    D3PO wrote: »

    thats not correct. I cant speak for all trackers but certainly on an AIB tracker you can overpay

    You can overpay on any banks variable rate product and as all tracker mortgages are variable rates you can overpay on any of these too


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    #8
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    killers1 wrote: »
    You can overpay on any banks variable rate product and as all tracker mortgages are variable rates you can overpay on any of these too

    concise and knowledgable as always. That is what I was 99.9% sure of but as I had a lingering doubt I didnt post it :)


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    #9
    irishgeo
    Registered Users Posts: 9,493 ✭✭✭irishgeo


    i overpiad my bank of ireland mortgage but dont forget to tell them you want over the principal amount.


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    #10
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    D3PO wrote: »

    concise and knowledgable as always. That is what I was 99.9% sure of but as I had a lingering doubt I didnt post it :)

    You should have just ran with it... I've seen a lot of posts on boards well below 99.9% accuracy... ;)


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    #11
    NIMAN
    Registered Users Posts: 33,613 ✭✭✭✭NIMAN


    killers1 wrote: »
    You should have just ran with it... I've seen a lot of posts on boards well below 99.9% accuracy... ;)



    Kick me when I'm down killers1! ;)


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    #12
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    NIMAN wrote: »



    Kick me when I'm down killers1! ;)

    Haha! Not at all! It wasn't a reflection on your post... I could give you a thousand better examples!


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    #13
    WhichCar
    Registered Users Posts: 39 ✭WhichCar


    You can either increase what you pay per month or you can make an out of course lodgement to pay off an extra month. Note that if you increase what you pay per month to reduce your mortgage term, you will also be paying more payment protection. So for instance if €230 pays off one month of your mortgage as an out of course payment, you would probably need to increase your monthly repayments by €250 to pay off an extra month per month (€230 +approx €20 payment protection).


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    #14
    fricatus
    Registered Users Posts: 5,081 ✭✭✭fricatus


    RAFA B wrote: »

    Have a tracker mortgage with UB ... Willthey allow me to overpay being on a tracker?



    Thanks

    To know for sure, you'll have to ask UB yourself, but I am overpaying my tracker with them, and I also got a leaflet with one of their letters a few years back containing a form that I could fill out if I wanted to overpay. So it looks like they probably encourage it - or at least they did some years ago. That may or may not have changed.

    RAFA B wrote: »

    Is it worth it for €200 pm?



    Thanks

    That's another matter, as a tracker is cheap money. Technically you might get a better rate on deposit, but then would you have the discipline not to blow it all on a car or a cruise?

    If you do overpay, you can't go into UB and ask for that money back, so if there's a possibility you might need it, it's not a good move from the point of view of flexibility.

    What are your reasons for overpaying? Maybe people can give more targeted advice if they know.


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