My mortgage provider is overcharging Tracker mortgages

Chris Arch

I have the proof that my mortgage provider which is part of a large bank from the North of Great Britain is overcharging on the interests that I paid every month on my mortgage, but their team refuses to discuss the matter with me. It took me 7 weeks and hours on the phone to obtain details showing capital and interests on my monthly repayments. These details clearly show that I am overcharged but they not want to acknowledge it.

For example, in April my interest rate was 2.65%, I was charged 871.54Euros of interests and my mortgage balance was 319,932.46Euro.

The monthly interests that I should have paid should be approx.:

The Balance of my mortgage (319,932.46Euro) x Interest Rate (2.65%) / 12 months. This is equal to (706.52 Euro)

This calculation above was considered appropriate by the lender to calculate interests on mortgages. But obviously it does not reflect the way they are charging me. No one in the institution want to discuss the matter with me. They ask me to contact the financial Ombudsman.

I have already lost days with this matter and it is only because my job load has dramaticaly dropped that I was able to do it. But still time is money... Does anyone know if the Financial Obudsman will deal fairly with this issue? I heard that the directors of this institution are supporting the bank directors. Can I trust that the Financial Ombudsman will act fairly?

Am I the only person in this situation?

Toots

OP, yes the Ombudsman is a free and impartial service, so you can trust them to act fairly.

Toots

Just a note, please don't mention institutions by name in relation to accusations of overcharging.

Chris Arch

Toots85 wrote: »

OP, yes the Ombudsman is a free and impartial service, so you can trust them to act fairly.

Well... I heard on radio that there were some illegal arrangements between the financial ombudsman and a lender that I will not name. This was recently made public by a recorded phone call...

Also the financial Ombudsman is looking at claims case by case. This means that if my mortgage provider is doing the same to all its tracker mortgages, the FInancial Ombudsman will only look at my personal case even if it is obvious that I am not the only victim...

I think that the bank should be investigagted not only my account... It is evident that this is not an isolated case... Honest working people who do not have the time to check and claim will just be roobed...

Toots

You might want to contact the financial regulator also. If there is a proven case of overcharging here, then AFAIK the regulator will investigate further to see are others being overcharged. I wouldn't put too much stock in what you have heard on the radio, until anything is proven it is all just hearsay. There have been a lot of rumors about banks in the last while and a lot of them have been nothing more than speculation.

Chris Arch

Toots85 wrote: »

You might want to contact the financial regulator also. If there is a proven case of overcharging here, then AFAIK the regulator will investigate further to see are others being overcharged. I wouldn't put too much stock in what you have heard on the radio, until anything is proven it is all just hearsay. There have been a lot of rumors about banks in the last while and a lot of them have been nothing more than speculation.

Thanks for your interest Toots85... Can I ask you to give me your position about the details that I gave regarding my monthly repayment... My lender is not able to explain why the amount of interests that they charge me is not reflecting the normal way of charging interests... Is that a proof that they overcharge me or what more do I need to prove it?

ferga_com

There are a couple of professional firms that perform audits of bank accounts looking for errors, e.g. www.bankcheck.ie - I'm not 100% sure that they also do mortgage account audits but they probably do. If you're considering pursuing this, you might want a second opinion from an expert.

Alternatively, you might find an online calculator such as Karl Jeacle's useful.

Regards, Liam

Toots

Chris Arch wrote: »

Thanks for your interest Toots85... Can I ask you to give me your position about the details that I gave regarding my monthly repayment... My lender is not able to explain why the amount of interests that they charge me is not reflecting the normal way of charging interests... Is that a proof that they overcharge me or what more do I need to prove it?

Without knowing the exact details of your mortgage it's hard to say, the only thing I wonder is what way does your provider charge interest. Is it possible that the interest charged out in April was for the month of March? On my own mortgage, interest is charged every quarter. Also, you'd maybe need to get clarification from them regarding the recent rate drops and at what point they passed these on to the customer, that might be the root of the discrepancy, ie if your rate changed mid month, the formula you used above wouldn't work, you'd have to work out the daily rate of interest, how much interest you'd pay per day, and then which days you were charged the higher rate and work from there.

Chris Arch

ferga_com wrote: »

There are a couple of professional firms that perform audits of bank accounts looking for errors, e.g. www.bankcheck.ie - I'm not 100% sure that they also do mortgage account audits but they probably do. If you're considering pursuing this, you might want a second opinion from an expert.

Alternatively, you might find an online calculator such as Karl Jeacle's useful.

Regards, Liam

Thanks Liam...

the problem with mortgage calculators is that they do not detail the monthly repayment. They will separate the amount of interests charged to the capital reimbursed. Then you do not know how much intersts you are charged...

Of course I will continue until I have a coherent answer from my lender which is part of a very known British Bank (I hope that I can say that without being deleted). I calculated that they are ripping me off nearly 1,500 euro per year, this is about 45,000 on the length of my mortgage...

But thanks any way

Ogham

Chris - how long is the mortgage term, how long has it been running, what was the original loan amount? Is it a repayment or interest only mortgage?

Chris Arch

Toots85 wrote: »

Without knowing the exact details of your mortgage it's hard to say, the only thing I wonder is what way does your provider charge interest. Is it possible that the interest charged out in April was for the month of March? On my own mortgage, interest is charged every quarter. Also, you'd maybe need to get clarification from them regarding the recent rate drops and at what point they passed these on to the customer, that might be the root of the discrepancy, ie if your rate changed mid month, the formula you used above wouldn't work, you'd have to work out the daily rate of interest, how much interest you'd pay per day, and then which days you were charged the higher rate and work from there.

Toots I have already given all necessary info. The bank after 7 weeks gave me their method for the calculation of interests...

For example, in April my interest rate was 2.65%, I was charged 871.54Euros of interests and my mortgage balance for the previous month (March)was 319,932.46Euro.

The monthly interests that I should have paid should be approx.:

The Balance of my mortgage during the previous month (319,932.46Euro) x Interest Rate (2.65%) / 12 months. This is equal to (706.52 Euro)

If that is not the proof that they have overcharged me then what is a proof?

Chris Arch

Ogham wrote: »

Chris - how long is the mortgage term, how long has it been running, what was the original loan amount? Is it a repayment or interest only mortgage?

first year interests only, I was already overcharged then but by only 28 euro if I use the calculation for interests as provided by my lender... Then I started to rreimbursed capital in March...

Ogham

Chris Arch wrote: »

first year interests only, I was already overcharged then but by only 28 euro if I use the calculation for interests as provided by my lender... Then I started to rreimbursed capital in March...

I'm not clear what your answer means?
Is the mortgage for 20 years or 25 or 30?
When did it start exactly and what was the original loan amount you borowed. These are things needed to work out what you should be repaying.(possibly)

Chris Arch

Ogham wrote: »

Chris - how long is the mortgage term, how long has it been running, what was the original loan amount? Is it a repayment or interest only mortgage?

Ogham,

If I consider my bank info, the only important numbers to calculate interest payments are the amount of your mortgage the month before and the interest rate...

Chris Arch

Ogham wrote: »

I'm not clear what your answer means?
Is the mortgage for 20 years or 25 or 30?
When did it start exactly and what was the original loan amount you borowed. These are things needed to work out what you should be repaying.(possibly)

the length of the mortgage only influence your repayment. If you borrow 320k like me on 30 years you will have to reimburse this money every month + paying the interests...

But if you have a 20 or 30 years mortgage it does not change you monthly interests... The interests are caluculated depending on how much you still have to reimbursed... Of course if you reimbursed on 30 years instead of 20 you will pay 10 years more of interests...

But however the length of your mortgage if your mortgage balance is 320k and your interest rate is 2.65% the same monthly interests will apply...

rameire

what you need to get is the dates the interset rates were applicable from,
as the rates have changed alot over the last few months,
also get the balances on the dates the rates changed.

your calculation method is correct for the bank you are talking about.
also usually the interest posted is for the previous month.

im sure you know most stuff already.

but ask for the complaints department, and log a complaint.
ask them for the details breakdown of the interest calculations and ask them what timeframe they will have those details back to you.

advise them if they do not respond you will be taking the complaint to the regulator or ombudsman whichever is relevant.

Ogham

Chris Arch wrote: »

the length of the mortgage only influence your repayment. If you borrow 320k like me on 30 years you will have to reimburse this money every month + paying the interests...

But if you have a 20 or 30 years mortgage it does not change you monthly interests... The interests are caluculated depending on how much you still have to reimbursed... Of course if you reimbursed on 30 years instead of 20 you will pay 10 years more of interests...

But however the length of your mortgage if your mortgage balance is 320k and your interest rate is 2.65% the same monthly interests will apply...

Looks like you seem to know you are right - so good luck to you.:rolleyes:

Chris Arch

rameire wrote: »

what you need to get is the dates the interset rates were applicable from,
as the rates have changed alot over the last few months,
also get the balances on the dates the rates changed.

your calculation method is correct for the bank you are talking about.
also usually the interest posted is for the previous month.

im sure you know most stuff already.

but ask for the complaints department, and log a complaint.
ask them for the details breakdown of the interest calculations and ask them what timeframe they will have those details back to you.

advise them if they do not respond you will be taking the complaint to the regulator or ombudsman whichever is relevant.

I have already made 2 complaints and I am now going to involve the financial Ombudsman...

However I am very annoyed because the representative of my Mortgage provider that I talked too are always trying to delay everything. For example it is not normal that it took more than 7 weeks and hours on the phone for them to send me a document dissociating my interests paid from the capital that I reimbursed on a monthly basis... Also, now that I have all the numbers, the people in charge with my complaint do not want to talk to me and the others can not access my file... The money is taken every month from my account, but the bank refuse to explain why the numbers do not add up... I am in a dead end... Then I am making a complaint to the financial Ombudsman...