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Mortgage : Food for thought

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  • 01-03-2010 9:43pm
    #1
    hinault
    Registered Users Posts: 5,932 ✭✭✭


    This morning I received a very interesting statement from my loan provider
    EBS to 31st December 2009.


    I bought a property in June 2006 for €180k.

    To 31/12/2009, I made repayments (which include interest/life assurance/property insurance, as well as the loan premium) totalling €50,086.

    That is 42 months repayments.

    The amount still owing on my mortgage after 42 months is..................
    €159,400.

    Just food for thought for people : to show, even after repaying €50k how little my mortgage has actually decreased.

    If I was to factor in the capital depreciation of the property !!!!!!!!!!!!!


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    #2
    MagicMarker
    Banned (with Prison Access) Posts: 32,865 ✭✭✭✭MagicMarker


    It's horrible isn't it?

    I don't owe nearly as much, but I checked my online account, saw that I had payed my monthly payment but there was interest added on that was greater than my payment:(

    3 steps forward, 1 step back.


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    #3
    Joey the lips
    Registered Users Posts: 10,262 ✭✭✭✭Joey the lips


    Ditto I got the same statement.....

    owed 209 1st jan

    payed 14k

    31st Dec Owe 205

    Shocking.....


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    #4
    hinault
    Registered Users Posts: 5,932 ✭✭✭hinault


    MagicMarker wrote: »
    It's horrible isn't it?

    I don't owe nearly as much, but I checked my online account, saw that I had payed my monthly payment but there was interest added on that was greater than my payment:(

    3 steps forward, 1 step back.

    Yeah, it is horrible : but I posted my message to illustrate to members here that even after large repayments, how little the overall amount has decreased.


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    #5
    homer911
    Registered Users Posts: 5,119 ✭✭✭homer911


    Do EBS still calculate the annual interest based on the opening balance at the beginning of the year?

    It used to be the case at least. When I had my mortgage with them I was advised to make "advance repayments" prior to 31/12. This had the benefit of an immediate write-down of principle and the benefit of reducing the interest charge dramatically for future years - you had to make sure that ESB recognised it as advance repayments or they would just knock if off the balance and expect you to pay as normal the following week. Based on my calulations, it saved a whole chunk of interest.

    (May not be the case now!!)


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    #6
    pog it
    Registered Users Posts: 2,912 ✭✭✭pog it


    Is it worth it?

    I mean if it is your own residential property that you live in and have the mortgage on.. would you rather be renting or are you happy you have your own space?


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    #7
    garbanzo
    Registered Users Posts: 742 ✭✭✭garbanzo


    Apparently it has something to do with the fact that you pay off a shed load of your interest in the early years of your mortgage and once you get around half way through you start hitting into the capital sum. This means you speed up the pace at which you pay it off as the years go by . . . . or something like that.

    I got mine too in recent days from the EBS and had a similar feeling. Ah well . . . only another 18 years and it will be all mine :-( . Still and all, I wouldn't move. Very happy where I am.


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    #8
    hinault
    Registered Users Posts: 5,932 ✭✭✭hinault


    homer911 wrote: »
    Do EBS still calculate the annual interest based on the opening balance at the beginning of the year?

    It used to be the case at least. When I had my mortgage with them I was advised to make "advance repayments" prior to 31/12. This had the benefit of an immediate write-down of principle and the benefit of reducing the interest charge dramatically for future years - you had to make sure that ESB recognised it as advance repayments or they would just knock if off the balance and expect you to pay as normal the following week. Based on my calulations, it saved a whole chunk of interest.

    (May not be the case now!!)

    I don't know if interest is calculated on the opening year balance.

    Looking at the amount deducted throughout 42 month period : the monthly repayment amount changed as the (ECB) interest rate changed during the 42 month period.

    I will phone EBS tomorrow to see and will advise if they can confirm same.


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    #9
    hinault
    Registered Users Posts: 5,932 ✭✭✭hinault


    pog it wrote: »
    Is it worth it?

    I mean if it is your own residential property that you live in and have the mortgage on.. would you rather be renting or are you happy you have your own space?

    It is worth having my own place, for sure.

    However €50k is a substantial chunk of money to pay over to the lender
    and to see the overall balance only reduce by €21k is food for thought.

    That's all.


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