pension credits and interest only mortgage

st999

My brother is receiving pension credits paid directly into his bank account every week. He thought that was all he was entitled to.

He got a letter from pension credit saying that they will pay £40 every week towards his mortgage and there is a lump sum back payment to be paid because of the delay.

The thing is because he has a tracker and his interest rate is 1.25%, he is only paying £50 per month for his mortgage.

So what will happen to his mortgage because of the extra £40 per week?

Stan

dmg24

The additional payment will be allocated against the capital amount owed.

[Deleted User]

the lump sum will also be paid direct to the lender

st999

So will the lender recalculate the interest on the decreasing capital every month?

Then as the capital decreases should his pension credit not be reduced every month?

He has an endowment maturing in two months time for approx a third of his mortgage so will the mortgage lender inform pension credit that the mortgage has been reduced or will he have to inform pension credit himself?

Stan

mark24c

the lump sum should be paid direct to him if he is up to date with his mortgage