Paying back loan to parents, lost track, HELP

mistalee

Please can someone advise me how to calculate how much i still owe and how long for. Thought it was a good idea at the time but now its a mess. Both parties are confused.

- In 2002 my parents took out a £22k repayment loan for 12 years on my behalf. Int rate was around 6.5% i think but maybe higher. This loan was added as a seperate payment to their mortgage at the same rate.

- I have been paying £250 a month since then (£152 loan and £98 interest i calculated at the start)
- However, I have found out that my parents have changed their mortgage 3 times since then. My seperate loan was added as part of the actual mortgage when they changed back in 2004 and has remained the same since then. The mortgage rate has fallen each time they have changed as follows

2004 4%
2006 3%
2008 2%
2010 3.2%

Im guessing my payments should have dropped each time they changed but I have always been paying £250. Therefor I must have payed off more than i thought. Can anyone advise how to calculate this as im really stuck.

Thanks in anticipation

Tixy

What was your original agreement with your parents?
Do they agree that your repayment would come down if they found a better interest rate?
Legally they borrowing the money from their then provide and lending it to you is 2 seperate transactions.

Assuming they are happy that you only need to pay back the interest that they incurred and so it lowers over time then you need to know the exact dates of the mortgage changes and the APRs and it should be easily to calculate how much would still be outstanding in a spreadsheet. If you are not great with spreadsheets put all the info and dates on here and someone will do it for you.

krycek985

I would keep paying the same for 12 years. Your parent took out a pretty massive loan for you and It would be nice to get a little back for the trouble dont you think ?

intranicity

krycek985 wrote: »

I would keep paying the same for 12 years. Your parent took out a pretty massive loan for you and It would be nice to get a little back for the trouble dont you think ?

Agree, nice of your parents to be in a position to help you, If it was me, I'd just carry on paying.

I would certainly not want to fall out with them over it.

Have they approached you over this saying we think you've been paying to much interest and want to reduce your payments, or is it you that think they have been ripping you off?

Guess a lot depends on the last question

CLAPTON

well

22,000 over a 12 year period with monthly payments of 250 would correspeond to about 9.4% APR. This seems rather high rate for 2002

the interest in the early period would be about 165 per month and not 98 which would be an average over the whole period (basically interest is worked out on a monthly basis on the amount of capital remaining)

after 24 payments you would owe about 19,767
if the rate dropped to 4% then
after a further 2 years you would then owe about 15,169
if the rate dropped to 3% then after a further 2 years you would owe about 9,939
if it them dropped to 2% then after a further 2 years you would owe 4,202
so if it then went up to 3.2% you would pay the debt off in a further 18 payments

mistalee

intranicity wrote: »

Agree, nice of your parents to be in a position to help you, If it was me, I'd just carry on paying.

I would certainly not want to fall out with them over it.

Have they approached you over this saying we think you've been paying to much interest and want to reduce your payments, or is it you that think they have been ripping you off?

Guess a lot depends on the last question

Its not like that, and i wasnt looking for moral advice, I was hoping someone could help with the questions I asked. Incidentally, my parents only want me to pay what I am supposed to pay whether that be 250, 200 or 150. And I did gift them a very valuble painting and treat them regularly so its not what is being presummed here.
Thanks anyway

mistalee

CLAPTON wrote: »

well

22,000 over a 12 year period with monthly payments of 250 would correspeond to about 9.4% APR. This seems rather high rate for 2002

the interest in the early period would be about 165 per month and not 98 which would be an average over the whole period (basically interest is worked out on a monthly basis on the amount of capital remaining)

after 24 payments you would owe about 19,767
if the rate dropped to 4% then
after a further 2 years you would then owe about 15,169
if the rate dropped to 3% then after a further 2 years you would owe about 9,939
if it them dropped to 2% then after a further 2 years you would owe 4,202
so if it then went up to 3.2% you would pay the debt off in a further 18 payments

Thanks Clapton appreciate that.

intranicity

mistalee wrote: »

Its not like that, and i wasnt looking for moral advice, I was hoping someone could help with the questions I asked. Incidentally, my parents only want me to pay what I am supposed to pay whether that be 250, 200 or 150. And I did gift them a very valuble painting and treat them regularly so its not what is being presummed here.
Thanks anyway

You misread/misunderstood what i was trying to say.

And you have answered the question I did ask, if they only want you to repay what it's cost them Clapton has given you an idea of where you are in what you owe.

All I was saying was is it you that wants to know or your parents, and from what you've said, it's your parents

Maybe I was being moralistic, but not in a bad way

good luck and hope no real offence taken as none was meant

mistalee

intranicity wrote: »

You misread/misunderstood what i was trying to say.

And you have answered the question I did ask, if they only want you to repay what it's cost them Clapton has given you an idea of where you are in what you owe.

All I was saying was is it you that wants to know or your parents, and from what you've said, it's your parents

Maybe I was being moralistic, but not in a bad way

good luck and hope no real offence taken as none was meant

Sorry intranicity I was meant to quote krycek985 not yours. Thanks though, appreciate your comments.