Intelligent Finance - are they ripping me off??

garydee77

Hi all - long time reader, first time poster here!

Just a quick one here - I got my mortgage statement update this morning and through reading it I'm wondering if I am being ripped off?

I'm on a tracker rate and basically this is what it says on the letter:

Previous interest rate : 2.59%
New interest rate : 2.09%
Effective Date : 2nd Feb 2009

Now my mortgage comes out on the 5th of every month but below this change information they give me my summary of new regular mortgage payments:
Date Payment effective from: 5th March 2009 - £xxx.xx

Now it seems that I will be paying the 2.59% rate on my payment taken out on 5th Feb - when they clearly say that the new rate is effective from the 2nd Feb?

Is this right and I'm missing something? Or are they wrong in this instance and I should be due the 2.09% rate on my payment on 5th Feb onwards??

Any help very much appreciated guys!!

Thanks!

GD

dunstonh

The interest being charged is changing on the 2nd Feb but your monthly repayment doesnt change until the 5th March. Nothing wrong with that. It just means your balance will drop a little quicker.

The direct debit date doesnt always corrospond with the interest charging date.

garydee77

dunstonh wrote: »

The interest being charged is changing on the 2nd Feb but your monthly repayment doesnt change until the 5th March. Nothing wrong with that. It just means your balance will drop a little quicker.

The direct debit date doesnt always corrospond with the interest charging date.

Thanks Dunstonh - I'm still a bit confused

So if the BOE dropped interest rates on Jan 8th by 0.5% then I realise Intelligent Finance don't rush themselves into making the rate change(unless of course it goes UP) - but they eventually do to my account and state that the new interest rate has moved from 2.59% to 2.05% and the effective date is Feb 2nd.

But yet on my Feb direct debit I will be paying on the 5th Feb (after the effective date of the 2.09%) the amount of interest they will charge is 2.59%

So in effect I actually don't get the interest change until a full 2months after it has been made?

Is this the norm??

Thanks for your time!

GD

baggies666

I am with IF and his has happened to me once before ages ago, I have since moved my mortgage repayment date to 28th, the changes made in Jan take effect from my payment Feb and this change of payment date worked better for me, if it goes up it works just the same they instantly put up my payments, I am on a tracker rate.

I suggest you log into the web site there is a tool there to change your repayment date

dunstonh

IF charge interest on a daily basis. So, the drop applies on Feb 2nd. The fact the payment doesnt change until 5th March doesnt matter.

Interest is calculated daily and gets added to mortgage once a month, payment comes in to clear it and reduce balance. This month interest added will be a little lower than mortgage payment.

garydee77

dunstonh wrote: »

IF charge interest on a daily basis. So, the drop applies on Feb 2nd. The fact the payment doesnt change until 5th March doesnt matter.

Interest is calculated daily and gets added to mortgage once a month, payment comes in to clear it and reduce balance. This month interest added will be a little lower than mortgage payment.

OK i think i understand a bit better now! Thanks guys!

GD