What Term to Fix Rates At?

Samuel T. Cogley

With KBC we can pay 10% of the mortgage during the fixed rate in anyway we want. We broke it down and over pay by that much each month.

Turkish1

davemie wrote: »

I was talking with BOI yesterday about their rates. I'm currently on 3.9% variable with an LTV < 50%. Their fixed rate is 3% across the board and I'm not sure if anyone offers much better than that at the moment.

Normally I would be against fixing, but if there is an option to over pay I would be happy.

Quick question for anyone that is over paying on a fixed. Do you have to overpay by a fixed amount each month or can you do one off annual payments?

Finally, when talking to the 'mortgage expert' in BOI, I was told that is was not possible to tell me the cost of breaking out of a fixed mortgage until I had signed up to one because rates can change! It was not possible to give me an example at today's rates and it was not possible to tell me how it would be calculated, as how it is calculated could also change!

Surely that is complete BS! Surely they can't change T&Cs midway through a fixed mortgage? What would stop them asking for one million dollar!

Anyway, I did read that the EU forced banks last year to only change the deposit interest as a penalty and not the interest they could have made, but I didn't find any examples.

BOI overpayment is 10% max, and i cant remember if that is 10% of outstanding principal or 10% of payments.

In fairness to them, the calculation to break is not exactly straight forward (relatively speaking) and does change daily. I put up thw formula a few pages back but you wont have all the info to calculate it. I cant see someone on the phone going and manually calculatijg an example for you.

I have an agreed overpayment of about 66%/month with BOI on a fixed rate.

If I revert to the normal payment the 10% thing shall kick in for future over payments AFAIK.

Supercell

davemie wrote: »

I was talking with BOI yesterday about their rates. I'm currently on 3.9% variable with an LTV < 50%. Their fixed rate is 3% across the board and I'm not sure if anyone offers much better than that at the moment.

Normally I would be against fixing, but if there is an option to over pay I would be happy.

Quick question for anyone that is over paying on a fixed. Do you have to overpay by a fixed amount each month or can you do one off annual payments?

Finally, when talking to the 'mortgage expert' in BOI, I was told that is was not possible to tell me the cost of breaking out of a fixed mortgage until I had signed up to one because rates can change! It was not possible to give me an example at today's rates and it was not possible to tell me how it would be calculated, as how it is calculated could also change!

Surely that is complete BS! Surely they can't change T&Cs midway through a fixed mortgage? What would stop them asking for one million dollar!

Anyway, I did read that the EU forced banks last year to only change the deposit interest as a penalty and not the interest they could have made, but I didn't find any examples.

You have to agree the over-payment amount in advance and it's the same every month. We are overpaying by about 40% so i don't know where others are getting this 10% thing from, at least one other person has posted here that they are significantly overpaying too.

If you don't agree an overpayment when signing over to the fixed rate you can only overpay by 10% going forward should you want to make extra payments.

Q&A

For comparison, and I'm open to correction but the 10% overpayment relates to the following, for:

Ulster - 10% of the outstanding balance per annum

KBC - 10% of the original balance over the life of a mortgage

Everyone else 10% of your monthly repayments.

The first 2 are the most flexible and arguably have the best rates/options.

If overpayment isn't an option then you're probably better fixing for as long as you can - which would be BOI/KBC 10 years.

Supercell

Augeo wrote: »

If you don't agree an overpayment when signing over to the fixed rate you can only overpay by 10% going forward should you want to make extra payments.

Thanks, that makes sense, BOI said to me that I had to agree the overpayment BEFORE taking the new rate, an academic exercise I thought at the time but understand it now.