Mortgage relief

houseoffun14

My wife and I are just over 3 years into our house. We where first time buyers. My query is regarding the recent budget announcment on increased mortgage tax relief for first time buyers.

I thought this would mean I would see a reduction in my monthly repayments. However my last monthly payment actually went up. My mortgage is currently in the middle of a 2 year fixed period. This is the opposite of what I thought should happen. Can anyone tell me if I am right or wrong, before I go ringing the bank.

Saruman

how can your payment go up with a fixed rate? That should be impossible. I assume you actually contacted your provider as soon as you saw this as to not would be stupid. What did they say?

Anyway do people need to do anything does anyone know? Will providers be reluctant to reduce the payment unless contacted?

houseoffun14

I got a letter from them in late December, saying due to changes in Tax relief it was going up.
I contacted them twice, tho I am still waiting for them to get back to me!

copacetic

it should be automatic, but interest relief should come up as a seperate item. i.e your mortgage payment should go out and interest relief come in, it should have doubled basically. mine did without doing anything..

delly

Mortgage relief for first time buyers went up a massivie amount, but this only lasts for 7 years of your first home. Even if you are not a FTB the relief has still increased so in both circumstances your mortgage provider should have automatically reduced your payments. An increase could be down to an increase in buildings insurance which is usually lumped in with your mortgage payment, but even with that I would expect you to be better off. Sounds like the mortgage providers have dropped the ball.

houseoffun14

Just spoke to the building society involved.
Now I am no expert in finance. But the reason for the increase I was given was as follows.

When I fixed my Mortgage last March, there was an error on the relief, so when they did their recent review a readjustment was made. Hence the small increase.
I have a feeling that something isn't right with this explanation.

PS Building insurance is with a different provider.

copacetic

you should still have seen an increase in relief with the new budget changes..

construct06

if you only applied for your TRS in the middle/end of a year well i think you are still eligible for the full amount of TRS for that year and subsequent years. No, how the Bank applied my TRS was by increasing the payments over the last few months of the year i applied for the TRS so that by end of year i received my full amount.

Then the following year i started on the proper amount of TRS, which in real terms has increased from the year before but as it is spread out over the full year, my TRS has actually decreased - so my monthly payment is costing me more. (but in reality its not! - if u know what i mean)

May the same situation applies to your current dilemma?