Monthly Mortgage Payments seem more?

snnexus6

I had a mortgage back in 2004 with Bristol & West but once the agreement came in the post I noticed the monthly payments were more than I'd expected. At the time interest rates were due to increase and so I had no alternative but to agree it.

I have recently contacted them to query and they say no PPI or any other values added to mortgage, and the values are correct.

The numbers are:
Total borrowed £93,299 which includes £299 fee
APR rate 4.89% (fixed 5 yr)
Over 25 years

I calculate monthly payment is £539.45 using a software package and many mortgage / loan calculation websites.

Bristol & West say it's £545 per month using the same figures.

Surely using the formula there is only one answer, so are B&W incorrect and are hiding PPI or something in the monthly payment?

latecomer

daily v monthly interest?

getmore4less

When is the actual finish date?

it might be over a slightly shorter term than 25 years allthough £545 is still a bit high.

Answer might be they are paying the £299 fee over the 5 years £5*12*5 is £300

thing is this was over 5 years ago so what were the actual annual statement saying for those years

snnexus6

Hmm good answer, will check out the figures later, in work.

I thought the fee £299 was just added to the overall mortgage value and was spread over the total 25 years and not the fixed 5 years.

It was def 25 years, IE 300 months.

I can remember the first payment was £800 odd to cover for some anomoly with mortage starting mid-month followed by £545 each month.

kingstreet

You need to know/use the actual rate, not the APR.

Example from a client's KFI - Bristol & West fixed at 5.69% until 30/04/2009 (APR 6.6%).

The payments for a £100,000 repayment mortgage over 25 years would be £625.49. By incorrectly using the APR, this would show a monthly payment of £681.47.

kingstreet

Just another thought. When sourcing a new mortgage, I've noticed there is often a difference in the monthly payments between clearing banks and building societies. This is because building societies collect in advance and banks in arrears. latecomer may also have a point about daily/monthly/annually calculated interest, as banks tend towards the former, building societies the latter.

For example, I've just keyed a case in Mortgage Brain and compared two exact same products, one with a bank, the other with a building society.

There was a monthly payment difference of £3.22 for the same amount, term, rate, no fees added etc. The bank's product has daily interest, the building society annual.