Calculate how much you can overpay monthly on Fixed

henke

Hi,

Might be a stupid question but will ask anyway. Recently my fixed mortgage moved over from Ulster to Permanent TSB and it has got the facility to overpay by 10%.

I am just wondering if I am overpaying monthly and I want to pay the max amount without being penalised is there a simpler way of working this out or would I need to regularly change the overpayment amount. My thinking is if your allowed to overpay 10% of the balance but every single month the balance of the mortgage will change. Maybe I am missing something or its the balance on a certain date.

Eg simple example.

I have a mortgage for €100,000 and have a balance of €80,000 that I owe.

I am repaying €400 a month without overpayment.

10% of €80,000 is €8,000 and then divide by 12 months = €666

So can I pay €400 + €666 = €1066

Then the next month my balance is €80,000 - €1066 = €78934 and lets say €200 interest = €79134

Now your monthly 10% is going to be less than the €666 and you will have to call the bank and get your overpayment amended and that would be every month if you wanted to pay the absolute max. overpayment.

I am wondering am I misunderstanding something or is my logic above incorrect. I don't mind changing it time to time but don't want to do it that often but equally don't want to get penalised. It was simpler to change with Ulster online, not so with Permanent TSB.

Danzy

It will be 10% of the original payment, it doesn't adjust over time.

the_amazing_raisin

I'd check with PTSB, I'm in the same situation as you and I called them recently to check the max overpayment and they said they were waiving any overpayment fees for the rest of the fixed term

I think it's because interest rates are higher now then when we started the fixed rate

Double check it with them to be sure, but that's what they told me. Make sure you ring the dedicated helpline for former UB customers, you should have gotten it in the post

henke

https://www.boards.ie/discussion/comment/120128079#Comment_120128079

Right so in my example the original loan was €100,000 so I could pay up to €10,000 (€833 per month overpaymentt, €1233 in all monthly) every single year for as long as I have the mortgage? That would significantly reduce my term if that is right and I had the means for it.

henke

https://www.boards.ie/discussion/comment/120128355#Comment_120128355

Interesting, yeah I will check that. So effectively I could pay back as much as I want a month without penalty? My fixed rate is good I don't understand how they would make money if I started paying off large chunks of it but will check.

Danzy

https://www.boards.ie/discussion/comment/120128658#Comment_120128658

I can in my mortgage, whether that applies to your one, I don't know.

We paid 10% off in 2022, and got it remortgaged for 10 years, big drop in payment and years.

henke

Hmm yeah from reading Ulster Bank and tsb it looks like the 10% is on the balance of the mortgage but if anyone else has any info would be great.

the_amazing_raisin

https://www.boards.ie/discussion/comment/120128668#Comment_120128668

I'll admit I don't fully understand it but basically if your fixed rate is lower than the ECB rate then the bank makes more money by having it on deposit with the ECB than by charging you interest on your mortgage

I was checking for a lump sum repayment, might be a different story for regular repayments

Just one thing to be aware of, if you're making regular overpayments they don't actually pay it off the principle straight away. It sort of builds up as credit and at the end can be used to pay off the mortgage early

If you want it to be paid off the principle straight away it looks like you need to make a lump sum payment and specify what you want done in the payment options form