help advise needed offset mortgage

tamhem1

hi there ,need a bit of advise regarding an offset mortgage I took out in 2008 with the clydesdale bank .the initial loan was for 30,599 which i was paying back at 307pm I now owe about 27600 .since the drop in interest rates I have been paying 258.46pm since april 2009 ,I have now recieved a letter from the clydesdale (1 year later) stating that they have done a review and I have not been paying enough and to ensure the mortgage is payed of within the terms, they are raising the mortgage by £20.00pm for its term (due to finish sept 2020)they do apologise for the miscalculated year so to speak but what I need advise on is
1. can they do this, it was there mistake telling me to pay 258pm for such a time
2. I have about 8000 in savings is it worth my while continuing with the mortgage or should I change it .
3. my plan was to put a 5000 lump sum in to it come nov as i hope to pay it off earlier is it worthwhile.
I dont know a lot about offset mortgages or mortgages and need advise .
thanks in advance

opinions4u

tamhem1 wrote: »

1. can they do this, it was there mistake telling me to pay 258pm for such a time

It would be negligent of them not to tell you to change things, otherwise the position at the end of the term would be significantly worse.

2. I have about 8000 in savings is it worth my while continuing with the mortgage or should I change it .

Your question isn't totally clear. What rate do you pay on the mortgage?

While you need to comply with the request to change your payments I suspect you will have been charged additional interest on the underpayments that have occurred (and will continue to be charged until things catch up with themselves).

I would suggest that you ask them to calculate this for you and that the make you an offer of compensation for slightly more than the amount in question.

VIGILANT22

and also to explain to you how an offset works and how to "work it"

magpiecottage

Why have you got £8,000 savings if you have an offset mortgage?

tamhem1

opinions4u wrote: »

It would be negligent of them not to tell you to change things, otherwise the position at the end of the term would be significantly worse.

Your question isn't totally clear. What rate do you pay on the mortgage?

While you need to comply with the request to change your payments I suspect you will have been charged additional interest on the underpayments that have occurred (and will continue to be charged until things catch up with themselves).

I would suggest that you ask them to calculate this for you and that the make you an offer of compensation for slightly more than the amount in question.

I believe its 4.59 although im not 100% sure

tamhem1

magpiecottage wrote: »

Why have you got £8,000 savings if you have an offset mortgage?

dont know, when I took out the mortgage I believed that the more I had in savings the less I payed, Im not sure If I,ve took out the right mortgage hence the query.

dimbo61

Your £8000 savings are in the offset account set against the mortgage ?