Overpayment of mortgage on a fixed rate with Ulster bank?

Paul_Mc1988

Online it says:

You can make overpayments on your fixed rate mortgage. An Early Redemption Charge is due if you repay all or part of your mortgage before the end of the set fixed period, however you can make an overpayment of 10% of your outstanding fixed rate balance each year without incurring an Early Redemption Charge.

So if my mortgage is €1300 per month and I'm fixed for 4 years and I have the BIC and IBAN can I overpay by €130 per month by transferring €130 into the account?

is_that_so

Ask them!

phormium

Depends on what your outstanding balance is, you can pay up to 10% of your outstanding balance per year, not necessarily the same as paying 10% extra onto your monthly payment. How much do you owe now?

Paul_Mc1988

phormium wrote: »

Depends on what your outstanding balance is, you can pay up to 10% of your outstanding balance per year, not necessarily the same as paying 10% extra onto your monthly payment. How much do you owe now?

Is that the outstanding balance of the total mortgage. If so that answers my question . I owe 330k. Does that mean I could pay up to 33k?

phormium

The total amount outstanding now, not what amount you took out originally and yes if that is 330k then 33k would be your max, check that with them but that's my understanding

silver2020

Yes, its 10% of the outstanding balance of the mortgage. Small monthly overpayments won't be an issue at all.

Paul_Mc1988

silver2020 wrote: »

Yes, its 10% of the outstanding balance of the mortgage. Small monthly overpayments won't be an issue at all.

Thanks very much silver 2020

paulh266

Is the fixed rate balance the same as the total balance?
i.e if you fix for the first 5 years of a 20 year loan, is the fixed rate balance based just on the 5 years that are fixed or the full 20 year balance?

Q&A

paulh266 wrote: »

Is the fixed rate balance the same as the total balance?
i.e if you fix for the first 5 years of a 20 year loan, is the fixed rate balance based just on the 5 years that are fixed or the full 20 year balance?

I'm not sure I understand the question.


Balance refers to outstanding amount. If you fix all your mortgage (regardless of how long you fix for) then fixed rate balance equals total balance. If you split your mortgage fixed/variable then fixed balance is less than total balance.

If you're talking about how much you can overpay by it's 10% of balance each year. Eg in year 1 with a mortgage of 200k you can overpay by 20k. Year 2 with a mortgage balance of 180k you can overpay by 18k.

The 10% break fee-free overpayment only applies for years mortgage is fixed. There is no limit or fee for early repayment of a variable rate mortgage.

Also remember that depending on how banks cost of funds change it may cost nothing or very little to overpay a fixed rate mortgage by more than 10%.

KilOit

Would the monthly payments change if you were to overpay on a fixed rate?

Q&A

KilOit wrote: »

Would the monthly payments change if you were to overpay on a fixed rate?

No your repayment remains fixed. However, a larger proportion of it goes towards capital reduction as the lower balance means a lower monthly interest charge.

colm_c

Did it online with Ulster bank the other day, took all of 10 minutes, sms and letter sent out within a week.

Surprisingly easy to do.