HSBC tracker mortgage calculation.

maveli

Hi,
Wondering how HSBC calculates the interest and repayment on their lifetime tracker. I am confused as it is different from the figure I can see from the excel sheet I got from this site. here are some details of the mortgage. Could any one help me understanding how they calculate this ?

Mortgage amount £120,000 drawn on 30/03/2008
Interest rate 5.23%
Payment start date 03/May/2008
following table shows the amount as per the shpreadsheet and what HSBC took

[LEFT]   Spreadsheet               HSBC
Capital     Interest     Capital Interest
-------    --------    -------- --------
225.33    523.00       232.74   576.46 
226.31    522.02       216.48   532.10 
227.30    521.03       234.68   513.90 
228.29    520.04       218.59   529.99
229.28    519.05       219.53   529.05 
230.28    518.05       237.57   511.01 [/LEFT]
 

Thanks

Maveli

Margin_Walker

HSBC calculate interest daily on all mortgages. What this means in your example is that the amount of interest included with your standard repayment varies according to how many days were in the previous month. You will find that the lowest interest figure will always be in the March payment as there are usually only days in February. At the same time the interest figure following a month where there are 31 days will be relatively high.

The first interest figure on your list is a lot higher than the rest because it covers 34 days from drawdown on 30/03 to your first payment on 03/05. It's nothing to worry about as it works itself out over the course of the year.

rs3100

You're not the only one struggling to understand HSBC's figures.

I drew an interest only mortgage of £97,976 at 5.99% on 5/9/08. Was told that the first repayment would be £939.56 collected on 3/11/08, followed by monthly payments of £489.35.

On 11/9/08 I made a capital repayment of £60,000, and received a letter telling me that the first repayment would now be £433.11, with monthly payments of £189.68

Now the bit I don't understand:

On 9/10/08 HSBC wrote to me again to tell me that the interest rate had gone down to 5.49% from that date. As a result, my first repayment (still to be - and now having been - taken on 3/11/08) would be £449.94 - an increase of £16.83. Ongoing monthly payments have reduced to £173.85.

After twice phoning the mortgage service centre, and sending a message via internet banking, I still haven't had an explanation. The only response I've had so far (twice) is, "We don't understand it either. We'll get someone to call you back". I'm still waiting.

There may be a simple explanation, but I can't see it, and I have to say that, until someone at HSBC explains it to me, I'm not feeling overly confident in their ability to work out how much I owe them.

maveli

thanks for the replies..this link says it is better to be on the daily one. so I am assuming it will be alright
http://www.independent.co.uk/money/mortgages/give-us-this-day-our-daily-interest-or-well-pay-much-more-on-our-home-424845.html