Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • CharlieChaplin69
    • By CharlieChaplin69 1st Dec 17, 2:43 PM
    • 1Posts
    • 1Thanks
    CharlieChaplin69
    Bank Has Advised I Am Due A Refund On Redeemed Mortgage
    • #1
    • 1st Dec 17, 2:43 PM
    Bank Has Advised I Am Due A Refund On Redeemed Mortgage 1st Dec 17 at 2:43 PM
    I wonder if anyone can offer any advice. I recently received a letter from my old Mortgage provider advising that whilst I was paying my repayment mortgage on a tracker rate that the amount the bank initially advised I had to pay was not corrected when the interest rates dropped in 2008/2009. As such they have written to say I am due a refund on the over payments made plus 8% SIMPLE interest as compensation. I have asked them for a breakdown of how they have calculated the refund figure but despite them offering me many figures over the phone, they decline to send me anything in writing that I can cross reference against my paperwork. My questions are:
    1. Am I entitled to see a copy of how they have calculated the refund?
    2. Is 8% simple interest a fair representation of of compensation?
    3. Do I have any other recourse against the bank or does anyone know of anyone who has approached this a different way.
    My concerns stem from that had I been made aware of the over payments then I would have reduced the payments and been able to enjoy the extra money each month and possibly used it for a holiday or an investment I would ordinarily have not taken for which I could now be benefiting from. The period of over payments stem from 2008 up to 2016 and relate to the majority of that period paying 4% over and above the rate should have been. Any advice or help would be greatly appreciate. Many thanks.
Page 1
    • BoGoF
    • By BoGoF 1st Dec 17, 2:49 PM
    • 2,723 Posts
    • 1,961 Thanks
    BoGoF
    • #2
    • 1st Dec 17, 2:49 PM
    • #2
    • 1st Dec 17, 2:49 PM
    TBH I think most of us would be delighted at an unexpected windfall, take the money and move on.

    Point 3 suggests you are after compo.
    • dunstonh
    • By dunstonh 1st Dec 17, 3:23 PM
    • 89,883 Posts
    • 56,562 Thanks
    dunstonh
    • #3
    • 1st Dec 17, 3:23 PM
    • #3
    • 1st Dec 17, 3:23 PM
    2. Is 8% simple interest a fair representation of of compensation?
    Have you lost an arm or a leg?
    Have you been disabled in any way?
    Have you lost earnings because of this?

    3. Do I have any other recourse against the bank or does anyone know of anyone who has approached this a different way.
    No.

    My concerns stem from that had I been made aware of the over payments then I would have reduced the payments and been able to enjoy the extra money each month and possibly used it for a holiday or an investment I would ordinarily have not taken for which I could now be benefiting from.
    You get nothing extra for hypotheticals. The 8% is your compensation.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • obay
    • By obay 1st Dec 17, 3:28 PM
    • 452 Posts
    • 329 Thanks
    obay
    • #4
    • 1st Dec 17, 3:28 PM
    • #4
    • 1st Dec 17, 3:28 PM
    I wonder if anyone can offer any advice. I recently received a letter from my old Mortgage provider advising that whilst I was paying my repayment mortgage on a tracker rate that the amount the bank initially advised I had to pay was not corrected when the interest rates dropped in 2008/2009. As such they have written to say I am due a refund on the over payments made plus 8% SIMPLE interest as compensation. I have asked them for a breakdown of how they have calculated the refund figure but despite them offering me many figures over the phone, they decline to send me anything in writing that I can cross reference against my paperwork. My questions are:
    1. Am I entitled to see a copy of how they have calculated the refund?
    2. Is 8% simple interest a fair representation of of compensation?
    3. Do I have any other recourse against the bank or does anyone know of anyone who has approached this a different way.
    My concerns stem from that had I been made aware of the over payments then I would have reduced the payments and been able to enjoy the extra money each month and possibly used it for a holiday or an investment I would ordinarily have not taken for which I could now be benefiting from. The period of over payments stem from 2008 up to 2016 and relate to the majority of that period paying 4% over and above the rate should have been. Any advice or help would be greatly appreciate. Many thanks.
    Originally posted by CharlieChaplin69

    That's a long time + 8% is amazing! What is the total value of your claim back?

    I wouldn't ask for anything more, the bank has been upfront and honest with you.
    1/12/16 - £152,599.00
    11/11/17 - £145,990.00
    Two Credit agreements to pay off - £13653! (inc interest).
    Sofa (DFS) (0%)£923/£923 - Paid off 7th November!
    Barclays Boiler (18.9%!)£400/£3021.36
    Barclays Car (5.99%)£0/£8,832.37
    • Thrugelmir
    • By Thrugelmir 1st Dec 17, 5:46 PM
    • 56,213 Posts
    • 49,592 Thanks
    Thrugelmir
    • #5
    • 1st Dec 17, 5:46 PM
    • #5
    • 1st Dec 17, 5:46 PM
    2. Is 8% simple interest a fair representation of of compensation?
    Originally posted by CharlieChaplin69
    It's the statutory interest rate that you would be awarded if making a claim through the courts. Likewise it is calculated using the simple not compound method. By paying you interest at this rate. Your old lender has discharged their legal obligation.
    “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”
    ― Warren Buffett
    • Edi81
    • By Edi81 2nd Dec 17, 1:01 PM
    • 327 Posts
    • 201 Thanks
    Edi81
    • #6
    • 2nd Dec 17, 1:01 PM
    • #6
    • 2nd Dec 17, 1:01 PM
    Jeez! Money grabbing or what?

    Be thankful for the windfall.

    8% is an astonishing rate of interest. Unless you know where to get that elsewhere!
    • AnotherJoe
    • By AnotherJoe 2nd Dec 17, 2:43 PM
    • 7,673 Posts
    • 8,286 Thanks
    AnotherJoe
    • #7
    • 2nd Dec 17, 2:43 PM
    • #7
    • 2nd Dec 17, 2:43 PM
    My concerns stem from that had I been made aware of the over payments then I would have reduced the payments and been able to enjoy the extra money each month and possibly used it for a holiday or an investment I would ordinarily have not taken for which I could now be benefiting from.
    Originally posted by CharlieChaplin69
    Which was it? Is it that you would have invested it all in bitcoins and now be a billionaire, and they should therefore just sign over the bank to you, or that you would have gone on holiday to Malaga, got someone pregnant and would now be paying child maintenance and university fees and so you owe the bank £25k?

    Call it quits and take the 8%.
    • haras_nosirrah
    • By haras_nosirrah 2nd Dec 17, 2:46 PM
    • 1,322 Posts
    • 2,468 Thanks
    haras_nosirrah
    • #8
    • 2nd Dec 17, 2:46 PM
    • #8
    • 2nd Dec 17, 2:46 PM
    My concerns stem from that had I been made aware of the over payments then I would have reduced the payments and been able to enjoy the extra money each month and possibly used it for a holiday or an investment I would ordinarily have not taken for which I could now be benefiting from.

    The above is very telling. Essentially you would have wasted the money - the chance of it going in an investment which would provide a return of greater than 8% was nil. It would have gone on spending money. The bank have done you a favour in financial terms and you will now get a decent payout you weren't expecting.
    • maninthestreet
    • By maninthestreet 2nd Dec 17, 5:20 PM
    • 15,156 Posts
    • 13,582 Thanks
    maninthestreet
    • #9
    • 2nd Dec 17, 5:20 PM
    • #9
    • 2nd Dec 17, 5:20 PM
    If you don't want the money, I'll have it.
    "You were only supposed to blow the bl**dy doors off!!"
    • dimbo61
    • By dimbo61 2nd Dec 17, 7:09 PM
    • 9,590 Posts
    • 5,182 Thanks
    dimbo61
    Now do something sensible with this money and pay it as a lump sum off your mortgage.
    Even if you are in the middle of a fix I am sure you could ask the Lender to reduce your balance with this lump sum.
    However I think you will spend it on holidays and nights out ?
    • getmore4less
    • By getmore4less 3rd Dec 17, 6:44 AM
    • 30,783 Posts
    • 18,391 Thanks
    getmore4less
    in case you do decide to come back.

    I wonder if anyone can offer any advice. I recently received a letter from my old Mortgage provider advising that whilst I was paying my repayment mortgage on a tracker rate that the amount the bank initially advised I had to pay was not corrected when the interest rates dropped in 2008/2009. As such they have written to say I am due a refund on the over payments made plus 8% SIMPLE interest as compensation. I have asked them for a breakdown of how they have calculated the refund figure but despite them offering me many figures over the phone, they decline to send me anything in writing that I can cross reference against my paperwork. My questions are:
    1. Am I entitled to see a copy of how they have calculated the refund?
    2. Is 8% simple interest a fair representation of of compensation?
    3. Do I have any other recourse against the bank or does anyone know of anyone who has approached this a different way.
    My concerns stem from that had I been made aware of the over payments then I would have reduced the payments and been able to enjoy the extra money each month and possibly used it for a holiday or an investment I would ordinarily have not taken for which I could now be benefiting from. The period of over payments stem from 2008 up to 2016 and relate to the majority of that period paying 4% over and above the rate should have been. Any advice or help would be greatly appreciate. Many thanks.
    Originally posted by CharlieChaplin69
    put the details up and I will have a go at working out how they got the figures.

    mortgage amount/date in 2008,
    rate(s) you were paying through out the period ,
    mortgage at the end of the period
    amount they have decided to give you.
    • getmore4less
    • By getmore4less 6th Dec 17, 9:18 AM
    • 30,783 Posts
    • 18,391 Thanks
    getmore4less
    (with permission)
    OP sent me some numbers so I have had a go at working out what difference it made not lowering the payment as the rates dropped.

    Starting debt :£88k
    rate : base + 1.29%
    payment : £528.40
    start payments date : 22/12/08
    last payment date : 20/07/16
    end balance : £46,813.10
    Compensation : £5100.

    based on the amount owing, the payment, and base rates around Dec 2006 of 5% I make the full term 33 years or very close so have used that to work out the payment due based on dropping rates.

    We know the exact dates of rate changes by mortgage providers are not the same as when the base rate changes but for this calc the same month will do.

    Running the numbers with the fixed payment and a payment based on the rate dropping in line with the base rate changes.
    (with some rounding to £100s)

    £47,500 £69,300 : end balance (not far off what the op got above)
    £61,300 £40,900 : total paid ( £20,400 difference)
    £40,500 £18,700 : Debt reduction ( £21,800 lower)
    £20,800 £22,200 : interest paid. ( £1,400 saved)

    From 12/2006 to 09/2008 the payments would have been close anyway.
    between 09/2008 and 03/2009 the base rate dropped to 0.5% and the new payments should have been around £300.
    7.5 years @ £220pm is £19,800 which accounts for most of the difference in actual payments.


    No idea how they calculate compensation at £5100 when there is no loss, the OP has saved around £1,400 in interest, just the opportunity costs.

    flat 8% on the difference in payments is only £1,600

    putting the differences into a 8% compounded over the period, less the interest saved on the mortgage gets into the ballpark(very rough calc could add it to the spreadsheet to see how close it gets).

    edit: I did the compound less the interest saved and got £6.2k.

    Be interested if there is any more info on how they calculated the compensation.
    Last edited by getmore4less; 06-12-2017 at 2:51 PM.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

254Posts Today

1,251Users online

Martin's Twitter