I think First Direct are over-charging my daily interest!

SonicTPA

Hi,

when I first thought about getting an offset mortgage, I made a simple excel sheet to work out if it would be beneficial. For the calculations, I made some estimations, and literally added the daily interest every day.

3 years later, and my tracker deal is coming to the end. I've revisited my spreadsheet, and input all the correct amounts from every day of my statements. I've also checked with First Direct how they calculate and add the interest, and checked the dates for when the interest rates changed, and double checked everything.

But each month, I seem to be paying up to a pound more than I've calculated, and one month, it was 5 pounds more. Would they really be getting this wrong? Can I find out retrospectively exactly how much interest they charged me every day? Is that an unreasonable request?

So what should I do now? I need to go over my calculations with someone from First Direct, but of course, they don't have any branches.

Any suggestions?

Sonic

RabbitMad

I would imagine this is a rounding issue within excel.

Also are there any transactions (like cheques) where the money appears in your account, but you don't get the interest until the following day?

SonicTPA

I don't think I've used more than 3 cheques in the last three years.

As for the rounding issue, I used 2 decimal points. Would First Direct use any more than that?

Sonic

pollyanna24

I imagine that they would. Had a similar query as I also was anal enough to work out daily interest. I couldn't figure out why my daily interest was sometimes £22.71, then £22.72 and then go down again. It turned out it was due to rounding figures.

SonicTPA

The problem is that the difference is always more than 50p, and up to £5. If it was just a rounding error, it couldn't really be more than 1p out per day, so 31p per month.

Sonic

RabbitMad

I can't comment on how you've set your spreadsheet up, but in my experience Excel doesn't just use 2 dp even if you show it to 2 dp. It uses that whole number as it knows it.

Are you counting interest from the day your wages goes in, where as FD count it from the following day?

EG. You get paid £2K salary on Monday. You offset that against Monday's interest, however FD only count that from a tuesday?

Also earlier I was talking about receiving cheques, not paying with them.

How much exactly are you getting worked up over?

SonicTPA

I'll have to have a closer look at the decimal points in excel.

I'm using the transactions on my statements to work out the interest. So if several things went out and my salary came in on the same day, I'm using the balance that they've quoted.

I haven't paid many cheques in either. I might only be talking about a pound a month, with one month at a fiver, but I haven't worked out the actual difference yet over the total figures for the last 3 years if you use my calculated interest - obviously slightly more mortgage will have been paid off, which will have an affect on interest later on.

I will talk to First Direct and get some exact info on them calculating the daily interest.

Sonic