Northern Rock Together

noddynoo

I have the above mortgage and have the basic secured loan and then a drawdown of 9000 which is unsecured and at a slightly higher rate.We are moving and paying this mortgage off as we are downsizing.I also have another personal loan and when I requestted a redemtion figure it included a rebate of interest which was great as I wasn't expecting it and they informed me that unsecured loans have to do this but the unsecured part of my together mortgage will have to be repaid in full with no rebate I don't get this at all

HelpWhereIcan

I am not 100% positive on this, but I will have a go and guess that it is to do with the way that your balance is quoted to you.

On most personal loans (including secured loans and those that charge daily interest), when asked for a balance, the lender will quote a figure that incudes an estimate of the remaining interest and insurance premiums to pay i.e the balance payable over the rest of the term. This is then reduced when a settlement figure is asked for to reflect the fact that the balance may include a couple of years' worth of interest and/or insurance premiums that is no longer payable. This effectively hides any early repayment penalties or vagaries in their calculation (rule of 78 for example - don't get me started :mad:) as the settlement figure given is often just the one figure or, at best, set out as "balance - rebate of interest and insurance premium = settlement figure".

Mortgages however are different and the lender will quote only the remaining capital balance (no interest) with any 'penalties' or interest due to the settlement date quoted seperately to give a total 'redemption figure'.

Because the Northern Rock Together product is essentially a mortgage product, they may quote the balance on the unsecured portion in the same way as they quote the secured balance.

In fact, this may be a more transparent way as it quotes only the remaining capital and makes it easier to see your capital balance reducing and the effect of any interest, but as you have illustrated, it could cause confusion .

This is by no means a definitive answer, just a guess at what the reasons may be. If you are not sure (or believe that the settlement figure you have been given is inaccurate) approach the Northern Rock for an explanation and make sure that you have been quoted a settlement figure and not a remaining balance.

Hope this helps