Tracker mortgage rate cut pass on confusion

tamsine_2

[FONT=&quot]Hi there,
I wonder if anyone can shed some light on the massive interest rate cuts of late and the relative reduction in mortgage payments? I'm with Abbey and took out a tracker last June which tracks 0.59% above the base rate. There is no cap so I've seen my rate go from 5.59% to 1.09%. I'm obviously very lucky to enjoy such a massive cut but had expected my mortgage to come down more than £200 from around £750 to £550 on a £110,000 repayment mortgage with just over 20 years left.
I am probably being crude in my calculations but I would have thought each 0.5% cut would mean around £40 off but it's much less than this. Is it not a simple case of working out the % cut off the total value of the loan divided by the months to get an estimate or does this just apply to interest only?
I just want to make sure that I'm not being ripped off as other people I know seem to have experienced much bigger reductions. An advisor at Abbey was supposed to call and explain how it works but didn't and subsequent calls have proved fruitless so any help would be much appreciated. Thanks[/FONT]

Robert_Sterling_3

It looks about right to me having taken a casual glance at it.

Since the outstanding balance is about £110,000 even if the interest rate was 0% that still has to be paid off over 20 years. That alone would cost in the region of £450 plus per month.

foreversummer

The people who have experienced must greater falls may have interest only mortgages. They will have seen their payments reduce a great deal more because they are not repaying any capital.

Foreversummer