Overpayment pepper

sean72

Hi I had a mortgage moved to pepper following my mortgage provider leaving the market. I have no arrears or anything else and I am still on a tracker.

I have been making overpayments to my mortgage account for a number of years and now I have over 7000 euros in overpayments made. However, this shows up on my mortgage account as a minus '-' arrears and doesn't seem to be going straight over the remaining capital balance or affecting the term.

My questions are, is this a normal way to process these overpayments or should I be contacting them to request this money goes against the capital and the term?

daheff

if its not coming off the capital, then you are still paying interest on that remaining amount. I'd say give them a call to double check what's going on and if they can apply the over payment against your mortgage.

sean72

Turns out when I rang them that they were not applying this credit to my capital. I then had to write (letter attached to email) to them to get it applied and mortgage and reduce the term. I'm sure that when I set this up I wanted this applied to the capital and was given forecasts. I think I have been done over like a kipper.

Jim2007

https://www.boards.ie/discussion/comment/121691306#Comment_121691306

If you have documentation from when you set it up, then you should be able to get them to revise it....

I say this regularly but it does not seem to make a difference... The people working in banks are not different to the people you work with every day - they make mistakes, they have other concerns on their minds and some do the 9-5 and are not particularly concerned about doing a good job. The best person to manage your financial affairs is you, but you got to take control and keep an eye on what is going on, particularly when you set something new up or there is a chance in the systems your bank uses.

Mrs OBumble

Why did you not ask your bank about this years ago?

sean72

https://www.boards.ie/discussion/comment/121692589#Comment_121692589

I have only recently had online access to this account. Before that we had statements and it looked like the extra payments were being added to the credit column like my normal monthly mortgage payments. There was never any reference to completion date of the mortgage on the annual statement. In fact, even on the online account it looks like the money has been taken off the capital amount in the 'outstanding balance' section. It was only when I questioned it I was informed that the 'outstanding balance' was minus the credit (e.g. €70,000), but that interest was being charged on 'outstanding balance' plus my 'credit' (e.g. €70,000 + €7,000 = €77,000). Because the credit was not actually being taken off the capital and was just sitting there like a strange savings account I didn't know I had. When I asked why they would do this I was told it was there in case I couldn't make payments and went into arrears. Fortunately, I have never missed any mortgage payments so I don't know why they'd think I need that facility and it certainly was never discussed or explained to me.

To be honest I don't think it was very obvious to the untrained eye. On any call with them I made it clear what I was trying to do i.e. reduce the term of my mortgage with extra payments. They would give me estimations of what the over payments would do but they would then proceed to accumulate the overpayments as separate credit, never taking it off my capital.

They will now correct this as we have written to them now but I feel personally this is not the most obvious and there was only one winner here in terms of the interest and it wasn't me.

tornadoofsouls

If this is a PTSB mortgage then I can confirm the interest is being calculated correctly in the background whilst taking into account the overpayment. However it will not be reflecting on the monthly repayments until you get the overpayments applied off the principal. They would write to you after going 3 payments in credit to advise you to complete the form for applying the overpayments. But all in all you should be good. I believe KBC applied the same process.