Am I paying too little for mortgage?

deuteronomy

I have been in my house over 3 years.
My mortgage product was a tracker it states

"a variable rate currently 7.4% with a discount of 1.24% giving a rate of 6.16% payable until march 2011, then it reverts to 7.4% again."

So come march after the 3 years were up, I was expecting the rate to go up 1.24% BUT here is what the letter I got said

"your 0.9% above bank of england base rate applied to your mortgage has expired, you are now on a discounted rate of 0.45% above the BOE base rate for the remainder of the mortgage."

so my payments went down after the 3 years!

totally confused

(I did have a natter with the IFA who arranged it for me (freind of family) he says if your happy then keep quiet and pay!)

Farmerbob

I dont think you have taken into account that the Bank of England base rate has gone down a huge amount since you took out your mortgage? This would explain why it has gone down as the 7.4% will be variable

deuteronomy

yes but it was set at 0.9% above the base rate with the intro offer I got (discounted 1.24%), so rates at time were 5.25+0.9 = 6.15%

and was set to go back up to 0.9% + 1.24 % to 2.14% above base rate,
rates now 0.5 + 2.14% = 2.64%


but is now just 0.45% above it?!

Farmerbob

Ah i see its a strange one I take it that you got the paragraph below from your original offer?

"a variable rate currently 7.4% with a discount of 1.24% giving a rate of 6.16% payable until march 2011, then it reverts to 7.4% again."

I would usually say look at the offer but if that's what it says then I cant answer, who's the mortgage with im sure there will be others on here who can help out.

michaels

They may eventually spot their error and try and claim the difference back so I would save the difference to be on the safe side but if they do ask it would be worth trying for a big goodwill gesture to make up for the inconvenience. Wasn't there a building society who undercharged by mistake recently which eventually wrote off the undercharges under media pressure?