Northern Rock Calculations

Jim28

Hi all!

This is doing my head in!

I have taken out an interest only mortgage with Northern Rock at 4.69%, but I can not figure out for the life of me how they calculated the amounts I need to pay each month!

The money was transfered to my solicitor on 8 October 2005 which amounted to £62500.

I was told I had to pay an initial amount of £192.74.

I figured that this amount must be calculated by £62500 x 0.0469/365 = £8.03

£8.03 interest per day and then this multiplied by the remaining days in the month = £8.03 x 24 days = £192.74

BUT as the money transfer was on the 6th October this would leave 26 days left in the month!!

AND the actual loan amount was £63220 because they added on valuation fees to my loan.

So first headache.

Second headache:

They said that my normal monthly payment would be £246.13 and I have no idea at all how they calculated this amount!

£63220 x 0.0469/365 = £8.12 which does not divide into £246.13

£62500 x 0.0469/365 = £8.03 which does not dive into £246.13 either!!

If anyone can shed some light on this I would be sooooooo grateful!

Many thanks in advance!

Joe_Bloggs

@Jim28

The money was transfered to my solicitor on 8 October 2006 which amounted to £62500.

Your post does mention a date 6 months into the future.
Why don't you reverse the situation. If you know the monthly interest payment and monthly interest rate then you can work out the priciple amount.
246.13/(0.0469/12) = £62975.69. This is less than the £63220 by £244.31 but greater than the sum paid out to the solicitor by £475.69.
There has been a net repayment of capital of £244.31. Did you get some kind of fee rebate or make a capital repayment ?
J_B.

homer_j_3

To be honest I think you will need a degree in maths because I think from memory that the NR use daily rate interest so their systems will effectively recalculate and forcast figures so it will not be a simple interest calculation.

Why not give them a call and ask for a breakdown on their calcs. I know one calc I saw from a lender was 1.5 sides of A4. Thank god for computers...

Gorgeous_George

Simple maths would make repayments £247.09. I could do a spreadsheet to calculate it but life's too short. It'll be the daily charging of interest that makes the small difference.

Paracetamol is good for headaches.

GG

Jim28

Hi George

I would be forever in your debt if you could calculate it on a spreadsheet as I have tried and not been able to get it right!!!

Gorgeous_George

Hi Jim

I can make it work if they add the £720 to your account on 15 Oct (1 week after the loan is made) and use 365.25 days to the year (to accommodate leap years). Please pm me if you'd like a copy of the Excel spreadsheet.



GG

Jim28

Yeah I have pm you George! Can I have a copy of the spreadsheet?

Jim28

Hi George! Any news?

davey4444

Not sure if this will help but there are some examples here - http://office.microsoft.com/en-us/results.aspx?Scope=TC&Query=mortgage