Reduce 30-year mortgage to 20-25 years?

Heisenberg1

Lenny wrote: »

I'm on a variable rate, think its 4.25% at the moment(aib)?
If we stick to what we're paying at the moment, it would work out a saving of about 150-160k on interest

Are your figures correct? I'm on that VR with AIB myself when inputting figures use the APR on the interest rate which is 4.32% on AIB's >80% LTV variable rate. The amount of interest you say you would be saving seems very high with what you are overpaying by. Based on a mortgage of €300k left by overpaying by €775pm you get the figures below on this I would check your figures again.


Current Repayment: €1,407.87 New payment: €2,182.87

Mortgage Term: 33 Years New term 15 Years and 8 Months

Cost of Credit: €257,516.52 New cost of credit:€110,379.56

Saving you €147,139.96 on interest payments.

Crumbs868

murphaph wrote: »

Are there ANY fixed rate products on the Irish market that allow any form of over payment? This is the norm here in Germany, They usually allow you to pay up to 5% of the original sum once in each calendar year as an over payment.

It's a myth in Ireland that you can't overpay a fixed rate mortgage(see all the replies on this thread) when you can once you don't overpay by a certain amount. Talk to your mortgage provider as each mortgage is different but by and large you can overpay by a couple of hundred(using a typical mortgage as an example) each month without penalty

wuffly

Crumbs868 wrote: »

It's a myth in Ireland that you can't overpay a fixed rate mortgage(see all the replies on this thread) when you can once you don't overpay by a certain amount. Talk to your mortgage provider as each mortgage is different but by and large you can overpay by a couple of hundred(using a typical mortgage as an example) each month without penalty

Its not a myth with EBS, there is physically no way to pay. You can let money sit on the account but it won't reduce what you owe as the interest is fixed. To reduce the term or the payment you need to break the fix which will incur charges and penalties based on how much of the term remains.

ronan45

Does the same prinicipal apply to One off yearly Payment (instead of once a month a lump sum at the end of the year) Or does it have to be an increased payment over the 12 months and not a lump sum once off payment?

missanxious

Sorry for butting in here but you guys seem to know a lot more than me so you might help with this query I have.

We are about to draw down our mortgage. We searched around and PTSB were offering the best rates for our LTV.
These are our mortgage rate options:

Variable 3.7%
1 yr fixed 3.49%
2 yr fixed 3.7%
3 yr fixed 3.7%
4 yr fixed 3.9%
5 yr fixed 3.9%

Which would you choose?

by the seaside

missanxious wrote: »

Sorry for butting in here but you guys seem to know a lot more than me so you might help with this query I have.

We are about to draw down our mortgage. We searched around and PTSB were offering the best rates for our LTV.
These are our mortgage rate options:

Variable 3.7%
1 yr fixed 3.49%
2 yr fixed 3.7%
3 yr fixed 3.7%
4 yr fixed 3.9%
5 yr fixed 3.9%

Which would you choose?

5 year fix. ECB base rates are very low by historic standards, so how could you cope if they were 4% higher in three years time?

missanxious

Good point. But then why not fix in a year's time when they might be lower. ECB not likely to increase this year?

Head wrecked with the decision making. Will probably go with 5yr fixed though, thank you

by the seaside

missanxious wrote: »

Good point. But then why not fix in a year's time when they might be lower. ECB not likely to increase this year?

Head wrecked with the decision making. Will probably go with 5yr fixed though, thank you

They may be lower, but in theory the current fix price should price in market expectations.

What you are doing when you fix now is removing uncertainty.

What would happen if Greece falls out of the Eurozone and contagion spreads to Spain, Italy and Portugal? Would ECB rates go up (to defend the Euro) or down. I have no idea and it may not be very likely, but can you afford it?

However, you do need to mentally prepare yourself not to be annoyed if you find that you could have got a better deal through another strategy. I fixed four years ago and have paid thousands more than I would have otherwise, but I don't care any more than I care about not backing the winner at the Grand National.

air

Woshy wrote: »

You have to tell them to apply the money to the capital on your mortgage, or you can withdraw it if you need it. Ebs said lots of people use it as a form of savings account as it's not super easy to get at and reduces the interest on your mortgage. I'll be putting it on the mortgage though unless absolutely necessary.

Do you have a normal variable rate mortgage with EBS as opposed to an offset current account mortgage?
If so how do you go about withdrawing money you have paid into the mortgage account?

Woshy

air wrote: »

Do you have a normal variable rate mortgage with EBS as opposed to an offset current account mortgage?
If so how do you go about withdrawing money you have paid into the mortgage account?

As far as I'm aware it's a normal variable rate mortgage. We only signed up recently so haven't withdrawn any money yet but the mortgage consultant said you request a cheque either in branch or over the phone.

W haven't had a statement yet either but the mortgafevsaud the balance etc does appear on your statement.

wuffly

air wrote: »

Do you have a normal variable rate mortgage with EBS as opposed to an offset current account mortgage?
If so how do you go about withdrawing money you have paid into the mortgage account?

Any branch can issue you a cheque once you have ID, if you call before you go in they should be able to tell you. If there are two names on the mortgage the cheque will automatically be made out to you both, there is no way around this, its a system thing. So you will need a joint account to cash it. They can't give balance's out over the phone but they can tell you if you are right or wrong once you confirm some details on the account. Depending on the branch you might need someone mid-level or senior but they can do it at the counter. Branch staff are quiet restricted in what they can do in many banks and get a world of abuse for it, if you're friendly and patient they will generally do their best for you.

ronan45

Woshy wrote: »

250 extra a month would take 12 years off our mortgage. It's madness! It's not a huge amount of money at all to find if you put your mind to budgeting etc so we're trying to do that every month.

Woshy does that still apply if that Interest rates (god forbid) go back up to the normal levels 4% or so?

SteM

ronan45 wrote: »

Woshy does that still apply if that Interest rates (god forbid) go back up to the normal levels 4% or so?

No, the amount of years reduced depends on the rate you pay. Take a look at karls mortgage calculator in the link below, you can easily see how much overpayments can save you and how a rate increase would effect it.

https://www.drcalculator.com/mortgage/

Woshy

It would change if the interest rates changed, yes. You need to input the interest rate when doing the calculations - as said above

Rackstar

murphaph wrote: »

We've just received a formal offer of a loan of 270k to build a house of a total value (including site) of 370k (so 100k deposit essentially)

Can I ask what type of mortgage this is and who supplies it? Is it available in Ireland?

murphaph

Rackstar wrote: »

Can I ask what type of mortgage this is and who supplies it? Is it available in Ireland?

Sorry no. It's from a German building society.