Can anyone help explain this?

Bitsy_Beans

TrickyDicky101 wrote: »

Hi

Here's how I think they have worked this out:

Outstanding balance £15,293.78

Nominal annual rate: 4% which equates to 4%/12 per month

Remaining term: 11 payments

Bung that in a mortgage calculator (repayments in arrears basis) and you get a monthly repayment of £1,418.30

So it looks like the remaining balance is being cleared over 11 months, not a full 12.

Which is what the lady at the bank said, it looked like they'd calculated the payments based on 11 months but mortgage is running for 13 months. Now in order to get the payments lower my dad extended the mortgage a futher month to June, however my concern is if their mortgage figures are cocked up are my parents actually overpaying the debt if the first set of figures is wrong?

Noodle - As far as I am aware that £15K figure excludes the last payment made on 25th april which is when repayments are made. Sorry don't have paperwork, my dad has it at work with him.

And no we are not going to let this drop, something is off here and I don't think the bank are being very helpful about it either.

thanks for all your replies, got to do the school run so will check back later

TrickyDicky101

Assuming the bank have calculated the outstanding balance correctly (no reason to suspect otherwise) then repaying that amount over terms of 11,12,13,14 and 15 months, your monthly repayments (at 4% pa) would look like:

Months Repayment
11 ____£1,418.30
12 ____£1,302.26
13 ____£1,204.08
14 ____£1,119.92
15 ____£1,046.99

Bitsy_Beans

TrickyDicky101 wrote: »

Assuming the bank have calculated the outstanding balance correctly (no reason to suspect otherwise) then repaying that amount over terms of 11,12,13,14 and 15 months, your monthly repayments (at 4% pa) would look like:

Months Repayment
11 ____£1,418.30
12 ____£1,302.26
13 ____£1,204.08
14 ____£1,119.92
15 ____£1,046.99

this is what concerns me Natwest have cocked up - in order to achieve a figure of £1302.26 per month my dad had to extend the mortgage to June 2012 which in my book is 14 months away not 12. So if they'd applied the repayments correctly in the beginning and extended the mortgage they'd be paying £1119.92.........something is definately amiss.

TrickyDicky101

You need to review your parents' mortgage statements (should have received them annually) to confirm whether any payments have been missed or not processed by the bank. This could amount to a fair amount of checking if you need to go back many years (and the records may simply not be available).

It looks like maybe Natwest typed the wrong term into the mortgage when it finished its fixed period, hence the incorrect monthly payment.

Bitsy_Beans

Will do, thanks everyone for your help