Mortgage PPI - Calculations Dont Add Up???

antdon

Hi All.....
I've just had a second mortgage PPI claim upheld by the Halifax.:j

They say they will pay back all of the payments plus 8% per year.... minus any claim payments made....

Great so far......

Then they give example payments.....

One example.........

"A 20 year mortgage of £100,000 taken out 3 years ago. Monthly mppi £50.
Total premiums (37 premiums at £50 each) £1850.00
Simple Interest at 8% per annum £232.43
Total offer £2082.43

How the hell do they come up with £232.43...............
(Yes I know I'm probably just showing my maths ineptness)

Any help from somone who knows how it is calculated would be very gratefully recieved

di3004

Well done on your success!:beer:

I'm sure someone will be here at some point and check these over for you, good luck.;)

phil_coxon

antdon wrote: »

Hi All.....
I've just had a second mortgage PPI claim upheld by the Halifax.:j

They say they will pay back all of the payments plus 8% per year.... minus any claim payments made....

Great so far......

Then they give example payments.....

One example.........

"A 20 year mortgage of £100,000 taken out 3 years ago. Monthly mppi £50.
Total premiums (37 premiums at £50 each) £1850.00
Simple Interest at 8% per annum £232.43
Total offer £2082.43

How the hell do they come up with £232.43...............
(Yes I know I'm probably just showing my maths ineptness)

Any help from somone who knows how it is calculated would be very gratefully recieved

this is interesting i also had mortgage protection with the halifax with
£100.000 mortgage but was paying approx £80 a month over probably 5 years on what grounds did they uphold your claim and how long did
it take

Derwent

antdon wrote: »

Hi All.....
I've just had a second mortgage PPI claim upheld by the Halifax.:j

They say they will pay back all of the payments plus 8% per year.... minus any claim payments made....

Great so far......

Then they give example payments.....

One example.........

"A 20 year mortgage of £100,000 taken out 3 years ago. Monthly mppi £50.
Total premiums (37 premiums at £50 each) £1850.00
Simple Interest at 8% per annum £232.43
Total offer £2082.43

How the hell do they come up with £232.43...............
(Yes I know I'm probably just showing my maths ineptness)

Any help from somone who knows how it is calculated would be very gratefully recieved

The figure of ~£232 for the 8% simple interest is correct.

antdon

Many thanks for the replies...

I think you have both misunderstood..
The Halifax have accepted the claim....

But have only sent a letter say so....and a sheet with 3 examples of the way the payments are calculated.....

The first example was in my post......

I just cant work out how they get the 'simple Interest' at 8% per annum can add up to £232.43

antdon

Derwent wrote: »

The figure of ~£232 for the 8% simple interest is correct.

Please show how this is worked out .... (yes I know I'm thick)

Derwent

antdon wrote: »

Please show how this is worked out .... (yes I know I'm thick)

Ok, so we know the premiums are £50 a month and the annual interest rate is 8% - therefore £50 x 8% = £4 per year in interest.

Then we have to calculate the number of days between the date of the payment and the date of settlement. For month 1 lets assume that the date of the payment was 1st August 2008 and date of settlement is 31st August 2011. That is a total of 1,125 days between dates.

Then we take the 1,125 days and divide by 365 days to tell us how many years it is - so 1125/365 = 3.082 years

Then you multiply the £4 annual interest by the number of years - in this case it would be £4 x 3.082 = £12.33

So £12.33 is the interest owed for the Month 1 payment.

Month 2 (September 2008) would be 30 days less, i.e. 1,095 days of interest owed. Therefore, as above, 1095/365 = 3.00 years of interest.

So £4 x 3.00 years = £12.00 of interest due on that payment.

And so it goes on, reducing month by month as the number of days decreases and therefore the number of years reduces. The £4 annual interest remains constant but the multiplier (number of years) changes every month.

antdon

Derwent wrote: »

Ok, so we know the premiums are £50 a month and the annual interest rate is 8% - therefore £50 x 8% = £4 per year in interest.

Then we have to calculate the number of days between the date of the payment and the date of settlement. For month 1 lets assume that the date of the payment was 1st August 2008 and date of settlement is 31st August 2011. That is a total of 1,125 days between dates.

Then we take the 1,125 days and divide by 365 days to tell us how many years it is - so 1125/365 = 3.082 years

Then you multiply the £4 annual interest by the number of years - in this case it would be £4 x 3.082 = £12.33

So £12.33 is the interest owed for the Month 1 payment.

Month 2 (September 2008) would be 30 days less, i.e. 1,095 days of interest owed. Therefore, as above, 1095/365 = 3.00 years of interest.

So £4 x 3.00 years = £12.00 of interest due on that payment.

And so it goes on, reducing month by month as the number of days decreases and therefore the number of years reduces. The £4 annual interest remains constant but the multiplier (number of years) changes every month.

Bloody hell!!

No wonder I couldnt work it out....

How the hell do they call this 'simple'

So, to try and work out the total for an 11 year ppi would take about..... well.....11 years

antdon

Can anyone recommend a mppi calculator

magpiecottage

antdon wrote: »

How the hell do they call this 'simple'

It is simple as opposed to compound. In other words you do not get interest on interest.

That may sound unfair but it is what a court would typically award.

-SDW-

try this one
http://www.newsquarechambers.co.uk/Calculators/calculators/interestcalculator.htm