Who is responsable for the interest

steveace777

Hi all
Looking for some advice on my morgage. For the last year i have been paying the same amount each month on my morgage. when i was looking at my loan aggrement and in the interest section it says
(a) Interrest on the loan shall be charged at a rate which is equivalent to 1.5% per annum above base rate. As at the 11 January 2008 this formula produced a rate of 7% per annum.
(b) Intrerest shall be charged on a 365 day and shall be compounded and applied on each Interest Application Date.
The question, is it the banks responsability to adjust the payment to reflect the base rate or should i have to inform the bank.
if i have overpayed interest am i entitled to get it back.
many thanks steve.

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Let_Us_See

Yes, and yes.

happybroker

I would imagine that the interest that is due will have been taken from your monthly payment and anything left over paid off the balance of the loan. Depending on the terms of the mortgage this may well have incurred early repayment charges.

I'm also guessing that you pay by a method other than direct debit and that the bank wrote to you when ever base rate changed to tell you what you new contractual payment was/is. If this is the case and you didn't ammend the payment you were sending them then I think the answer may actually be no....and no. sorry

Gorgeous_George

My guess is that the mortgage repayment amount will be set once per year (with subsequent over/under paymenhts being applied annually).

Also, whilst it sounds like a tracker, was there a fixed rate period? Finally, even if it is a tracker there may be a floor (or collar) - a rate below which it cannot fall.

Post more details for a better guess.

GG