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Overpayment of EBS mortgage

  • 24-07-2018 2:11am
    #1
    Bojill
    Registered Users, Registered Users 2 Posts: 349 ✭✭


    Hi,

    I pay my mortgage by bank transfer, and regularly overpay by a small amount.
    I just checked my account and when the mortgage comes out on the 7th, I will be in credit of approx 500 eur in the mortgage account.
    Is this 500eur just sitting there doing nothing or is it reducing the amount of interest I'm paying by whatever small amount.
    I've emailed EBS but they didn't reply.

    Thanks


Comments

  • #2
    coylemj
    Registered Users, Registered Users 2 Posts: 25,479 ✭✭✭✭coylemj


    Is it a variable rate mortgage?

    Is there a 'service account' sitting alongside the mortgage account through which your payments are channelled?

    If the mortgage is on a variable rate then the overpayment should reduce the interest being levied as you clearly intend. But if it's fixed, they may be simply parking your overpayment in a service account and leaving it there. That's the only explanation I can think of as to how you can see a 'credit balance' on a mortgage account which by definition should always be in the red.


  • #3
    Bojill
    Registered Users, Registered Users 2 Posts: 349 ✭✭Bojill


    coylemj wrote: »
    Is it a variable rate mortgage?

    Is there a 'service account' sitting alongside the mortgage account through which your payments are channelled?

    If the mortgage is on a variable rate then the overpayment should reduce the interest being levied as you clearly intend. But if it's fixed, they may be simply parking your overpayment in a service account and leaving it there. That's the only explanation I can think of as to how you can see a 'credit balance' on a mortgage account which by definition should always be in the red.

    Thanks for the reply,

    Its a variable, I made my monthly payment yesterday, which is showing online today.
    However the 'amount you owe' ie the mortgage,hasn't reduced despite the payment.
    I'll give them a call but I suspect the credit is doing nothing for me.

    Thanks again.


  • #4
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,727 Mod ✭✭✭✭Henry Ford III


    Ring the lender. They are the only people who can confirm how your overpayment is being treated.

    Ideally it should be credited against the capital balance of your mortgage as soon as it is paid.


  • #5
    canonball5
    Registered Users Posts: 445 ✭✭canonball5


    Bojill wrote: »
    Hi,

    I pay my mortgage by bank transfer, and regularly overpay by a small amount.
    I just checked my account and when the mortgage comes out on the 7th, I will be in credit of approx 500 eur in the mortgage account.
    Is this 500eur just sitting there doing nothing or is it reducing the amount of interest I'm paying by whatever small amount.
    I've emailed EBS but they didn't reply.

    Thanks

    I can all but guarantee it is just sitting there. I had a similar discussion with PTSB last month and I asked them to move the credit on my account off the principle and they refused. I have to fill in a form (I forget the name) if I want to pay additional monies off the principle each time.

    I would have thought it would be straightforward but of course it is not. Basically they don't want you to pay off the principle quicker as they lose money on the interest they charge.


  • #6
    Bojill
    Registered Users, Registered Users 2 Posts: 349 ✭✭Bojill


    Just to update, and for anyone in a similar position, I had a rare weekday off and called EBS today.
    They confirmed that the 'credit' was doing nothing and I would have to inform them in writing what I wanted to do with it, which confirms canonball5 post.
    A letter with all the details and signed by both people on the account can be scanned and emailed to them.
    The layout and info on their online portal is certainly confusing and seems to contradict what he said, but thats the info I was given today.
    Thanks for all the help folks.


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  • #7
    canonball5
    Registered Users Posts: 445 ✭✭canonball5


    Bojill wrote: »
    Just to update, and for anyone in a similar position, I had a rare weekday off and called EBS today.
    They confirmed that the 'credit' was doing nothing and I would have to inform them in writing what I wanted to do with it, which confirms canonball5 post.
    A letter with all the details and signed by both people on the account can be scanned and emailed to them.
    The layout and info on their online portal is certainly confusing and seems to contradict what he said, but thats the info I was given today.
    Thanks for all the help folks.

    Glad to hear you got it sorted. Couldn't agree more with the confusion sentence. How could something so simple be so complicated to them? I was actually asked "why I would want to pay off extra money", it worries me for the next recession that these fools haven't learnt anything.


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