Mortgage Calculation

MemeBox

Hi all

I have asked my bank for the process by which they will generate my monthly mortgage payments. They have told me that they are unable to answer. I am aware that there are mortgage calculators online and I am able to use them. I am also able to work through the mathematics on mortgagesexposed.

My issue is this: If they do not tell me the process by which the monthly payment is generated how can I know that any future monthly payment is correct? How can I know that the process by which the monthly payment is calculated is static and not subject to change, potentially in arbitrary and costly ways? I am genuinely shocked that they do not provide this information as a matter of course! It seems to leave them free to move the goal posts whenever they feel like it, is this true?

Is it unreasonable for me to require this information before I take out a new mortgage? Specifically I am looking at a tracker mortgage, but I do not think the details of this matter.

Thanks all!

Marcus

kingstreet

Most lenders can tell you if a mortgage will be annual/quarterly/monthly/daily rest. This is the way the balance/interest is calculated.

Brokers get this information on their sourcing reports and most products have it in their terms shown online.

Jimbo1976

There is a standard formula for a repayment mortgage based on amount borrowed, term and interest rate. Your bank will use this.

I would love to tell you that banks are infallible but as Clydesdale recently showed it is possible for them to get it wrong. It undercharged a number of its clients and when it came clean and admitted the mistake it wanted to claim back the underpaid amount, there was such an uproar it was forced to write this off.

When you set your mortgage up you can plug it all into a mortgage calculator to see if what the bank is quoting matches what you think is right. Once you get going its near on impossible to check the payment is right when rates change as it depends when the change is made in the month, when interest is calculated, when your payment is made etc