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Mortgage question

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  • 03-02-2010 11:02am
    #1
    dubtom
    Registered Users Posts: 3,084 ✭✭✭


    A banking question I hope someone with more understanding of Mortgages than I can help. In 09 I took Jan and Feb payments off,the idea being the twelve payments would be spread over the following 10 months. This was a scheme the bank was running at the time. I'm on a tracker mortgage so the payment for March,actually for the complete year if I remember correctly was €1025 approx. This january the payment taken was the same.I had thought I'd have a considerable reduction so phoned them up. They told me I should hear shortly what my payment should be but she did a calculation over the phone and said the payment would be €1018, the interest for Jan 09 was 3.75% and Feb 3.5%, and that would have been included in the yearly payments of 09.

    So I asked her to explain how if ten payments for the year were €1025 how could twelve payments be €1018,giving that the interest rate that I'm paying now is somewhere between 2.25 and 2.5%,a percentage point lower than 1 year ago. She threw a few numbers at me,it didn't make sense then and the confirmation letter arrived today stating that the payment would indeed be €1018 per month.I cannot grasp how I'm paying only €6 less for twelve monthly payments than I was for 10, especially giving that the interest is considerably lower.

    Can anyone shed some light on this for me,I feel like I'm been ripped off. I intend to phone the bank again, but want to make sure I'm not deluding myself first,does what I'm saying make sense to anyone?


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    #2
    dudara
    Registered Users Posts: 33,518 ✭✭✭✭dudara


    Moved to Banking & Insurance & Pensions

    dudara


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    #3
    Ogham
    Registered Users Posts: 1,844 ✭✭✭Ogham


    Has your mortgage tax relief gone down maybe?


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    #4
    Priapus
    Closed Accounts Posts: 114 ✭✭Priapus


    Hey!

    First thing I'd ask is whether those two months' payments were in fact capitalised. i.e. added to your outstanding principal, as opposed to being spread over the 10 month Mar - Dec inclusive period. If this is the case it'll cost you a lost more in interest over the life of the loan.


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    #5
    dubtom
    Registered Users Posts: 3,084 ✭✭✭dubtom


    As far as I remember,I'd have to check my records to be sure,the monthly payment before I took the two months was around the 900 mark, it was added on to the following 10 months payments. Does anyone know if there is a yearly set minimum before interest,ie, lets say the mortgage is 100000 over 10 years,so each yearly payment would be 10000+ interest?

    Ogham Has your mortgage tax relief gone down maybe?

    It possibly has,but not to the tune of 170 or so a month.

    Actually,I've just made up my yearly total at this years rate, compared to last year I will pay €1966 more. Is tax relief reduction that much?


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