what interest rate am I on???

chloe99_2

hi everyone - silly question - but if my mortgage was taken out for for £44000 and my repayments are currently £342 pcm over 20 years (repayment mortgage), then what is my interest rate? I used to be good at this but my brains gone all fuzzy since being a stay at home mum with baby!!

nic82

I don't know if this is right because it seems very high...

I used http://www.channel4.com/4money/mortgages/features/overpayment_calculator.html

and put in:

loan amount: 44000
loan period: 20
overpayments: 0 (as I didn't want to work out anything to do with overpayments).

I then played around with the interest rate and if you type in a rate of 7.05%, it reckons that your monthly repayment is £342.45.

Like I said, I could be way off here, but it seems logical to me how I worked it out. It just seems high to me though. Hopefully someone else will be along soon to confirm it (or give the right answer!).

zar

By trial and error using the guardian's calculator here

£44000 over 20 years at 7.05% has a monthly repayment of £342.45.

After Amt. Owed Int. Paid
5 Years £37,982 £14,529
10 Years £29,430 £26,524
15 Years £17,275 £34,916
20 Years £0 £38,190

Ah just noticed I've been pipped at the post!

peterg1965

Chloe

I am no expert but i reckon on those figures your interest rate must be over 7% - £44K over 20 years! That is way over the odds! That is if the mortgage is pure repayment.

Pete

nic82

zar wrote:

Ah just noticed I've been pipped at the post!

Sorry about that Zar. Glad you came up with the same figure as me though!

Thefunkygibbons

Do you have an annual mortgage statement

That figure you quoted may have some house insurance and/or life insurance bundled in it

If you don't have, ring them up, they can look it up quite easily

pennies2pounds_3

Um why not ring the company you have the mortgage with and ask - seems like the obvious answer to me :rolleyes:

chloe99_2

thank you all - you are right - it does include house insurance at £16 pcm so mortgage payments per month are 342 - 16 = £326pcm so 6.45%.

It's a "rent to own" "mortgage" so we don't pay interest as such - our payment includes part capital and part rent - the rent being in proportion to the proportion of the house the we own (based on the house value on the date that we took out the "mortgage") - so, like repayment mortgages, if we make extra payments they will go off the capital and simultaneously drop the amount of rent which will automatically increase the size of the contribiution towards capital that is included in the standard monthly payment (if you see what I mean.......!)

I really wanted to know the equivalent interest rate so I could use the extra payment calculators as I guess (brain still a bit fuzzy here) that they will have same or similar effect on our mortgage.

What I can't work out is if you start extra payments part way through the term, how do you put that into the calculator, do you use currrent capital outstanding, current term outstanding and the overpayment you want to make? I'm not sure if that would work for me as you guys have calculated my interest rate for me based on when mortgage was taken out, but I bet if I put current £ and term outstanding plus current payments, I would get a different answer????? Or maybe I wouldn't???? maybe I'll just go check.....

Any help greatly appreciated. Thanks

chloe99_2

Ah haa - using recent balance/term/monthly payments and correct figure for insurance (£13.34) the interest rate is 6.35% (or was at April 2005 - we are due for an annual review april 2006)