?wrong statement figure

tiredredhead

I am at a loss to work this out.
I borrowed 245,699 in Sept 06. Interest rate 4.89% fixed for 2 years. Over 35 years in all.

I am now securing a new deal as obviously 2 years have passed. I now owe 241,737.49.

In 2 years i have paid 29,357.52 (24 X 1223.23)
But only 3961.51 has come off the balance.
I know that you pay a really high proportion of interest for the first few years but it still seems wrong, when I put the figures into various mortgage calculators I get lower figures.

atlantis187

The statement sounds about right we took our mortgage of £155k in Nov 2006 have been paying £900 a month for the last 2 years. Last week I rang them for the outstanding balance because am shopping around for a better deal the the balance stands at £149800.

Even though we've paid around £21600 in total over the 2 years we have only cleared around £5k of the capital.

tiredredhead

Thanks atlantis that just makes me even more worried. You have made payments of 21,600 and paid 5k off the balance.
I have paid 29,357.52 and only paid 3961.51 off the balance.
Now unless it is because my term was stupidly long i think they have made a mistake.

lynnexxxo

I know youare shocked but my calculations

year 1 you owe 245669 * 1.0489 = after 1 year you owe 257682.22
year 2 you owe 257682.22 * 1.0489 = after year 2 you owe 270282.87
you have paid 29357.52

Therefore 270282.87 - 29357.52 = 240925.35.

Statement figure 241737.49.

difference about 800 pounds but you'll probably find this is a discharge of mortgage fee, and maybe an extra few days interest or something.

Hope this makes it clearer.

tiredredhead

I know that the payments mostly go on interest, so would not have expected to have paid loads off but i was expecting it to be around £240,500 ish.
Just found a statement i had in June 08. which showed Sept 07 start balance of 242953.63 and June end balance of 242050.34 this covered 8 payments of 1223.93 and i only paid £900 off the balance in that time.

dunstonh

Figure seems about right. A 35 year mortgage is going to see very little come off the in early years. Its bad enough with a 25 year one let alone 30. or 35

You cannot compare atlantis187's example as the mortgage term wasnt mentioned. My bet is that its not 35 years.

tiredredhead

Yes i thought that might be the answer. I have now cut my term to 25 years and i will be overpaying from now on, as a priority.