Ulster Bank - Mortgage Payments

ALEXII

In May 2011, I was informed by Ulster Bank of an 0.6% increase (4.35% to 4.95%) in my mortgage rate. The new payments being requested appeared excessive as the increase in them was somewhat larger than the monthly equivalent of 0.6% being applied to the Outstanding Amount. I asked the Ulster Bank Mortgage Centre to explain the new payments and they refused.

I then lodged a complaint with Ulster Bank about an excessive payment demand. In their Final Response to me they outlined in complete detail how they did their calculation, not only for the new payments but also for the previous payments. I, and others, tested these calculations on a variety of mortgage calculators and consistently found that none of the calculators produced the increase in payments being requested by Ulster Bank. Even the mathematical formula supplied to me by Ulster Bank failed to produce the requested payments.

I then referred the matter to the Financial Services Ombudsman. In his finding the Ombudsman declined to specifically state whether the requested payments had been computed correctly or incorrectly by Ulster Bank. He subsequently declined to explain his finding, citing legal restrictions on any comment by him. However, the Ombudsman did make an award to me because ”Ulster Bank caused confusion to be suffered on the part of the Complainant and, as such, was guilty of maladministration”.

Having gone through the Ulster Bank complaint procedure and the subsequent investigation by the Ombudsman, I have seen nothing to change my original opinion that the requested payments were excessive. The intriguing thing about all this is whether the situation is unique to me or perhaps it applies to all mortgage holders.

To check the correctness of payments, one needs to know the Amount Outstanding and the Term remaining, at any particular time. Mortgage calculators are available on line at many web sites e.g. myhome.ie, onus.ie etc. Where the Term is in both years and months, it should be entered as a year decimal value. For the more mathematically adventurous, there is an Excel Function (pmt) which will also do the calculation.

I am curious to find out whether the Ulster Bank has caused confusion to be suffered by anybody else,

chris85

I suppose why dont you throw up the formula UB have calculated it with and may see where they are coming from with it. Also what way you calculating it. Wouldnt mind having a look.

ALEXII

The Ulster Bank formula as indicated to me is as follows.
It is similar to the one in the Monthly Payment Formula section of the following link
http://en.wikipedia.org/wiki/Mortgage_calculator


R*PV

---

1-(1+R)^-n


R = Monthly Rate = Annual Rate /12 in decimal format
PV = Present Value
n = Term in Months

In their Final Response to me Ulster Bank stated that the above formula produced monthly payments of €10,245.50 in respect of the following parameters:

Annual Rate = 4.95%
PV = €185,978
n = 20 months

hwfs.ie

ALEXII wrote: »

The Ulster Bank formula as indicated to me is as follows.
It is similar to the one in the Monthly Payment Formula section of the following link
http://en.wikipedia.org/wiki/Mortgage_calculator


R*PV

---

1-(1+R)^-n


R = Monthly Rate = Annual Rate /12 in decimal format
PV = Present Value
n = Term in Months

In their Final Response to me Ulster Bank stated that the above formula produced monthly payments of €10,245.50 in respect of the following parameters:

Annual Rate = 4.95%
PV = €185,978
n = 20 months

based on this calculation i get a re-payment of €9,706.90 per month.

I am not sure how you should proceed if you already sent a complaint to the ombudsman.

The PV would need to be €196,297 to generate a payment of €10,245.50pm.

ALEXII

€9,706.90 is also my estimate.

I have given up on getting an intelligent response from either the Ulster Bank or the Ombudsman.

My purpose in posting is mainly curiosity as to whether other mortgage holders have encountered similar problems with Ulster Bank.

ALEXII

Interesting to note that there is a "Report Post" button on all posts in this thread. One wonders why? All previous and future posts by me on this topic can be fully verified, if necessary, by documentation I have received and which is in my possession.

Mena

ALEXII wrote: »

Interesting to note that there is a "Report Post" button on all posts in this thread. One wonders why? All previous and future posts by me on this topic can be fully verified, if necessary, by documentation I have received and which is in my possession.

It's there on all threads and all forums.

ALEXII

Thanks Mena.

I misunderstood the way the button functions. I get it now.