MSE News: Northern Rock pays £270m to 150,000 after gaffe

Thrifty_Pixie

tracy7 wrote: »

I'm not quite sure I understand what you mean by an increase in your payments of 7.3%? Surely a 0.35% (APR) increase is just that and could not increase your payments by 7.3% unless I'm completely missing the point of what you are saying.

Being quite sad (or very keen to save money - take your pick!!) I sat and created my own spread sheet to find out what affect making different overpayments would make to the term of my loan quite some time ago. Unfortunately since having my computer returned to store settings after getting a virus I can no longer access it or set up another one until I can get the programme reinstalled!

An increase of 0.35% from 4.78% would be a rate of 5.13%, that is 0.398% per month to 0.4275% per month (0.499 at 5.99%, my original interest rate)

When interest rates went from 5.99% to 5.33% my payment on the loan part of the together mortgage decreased by £6.40 and from 5.33% to 5.08% by a further £2.89 then from 5.08% to 4.78% a further £2.59. These are the figures I worked out from my newly reprinted, rejigged statements! So I would envisage my payments on the loan part would increase by just over £3.43 a month.

I'd have to sit down with all my other paperwork to work out the increased payment on my mortgage and my head is now spinning...... its not used to all this maths! I won't be giving up my day job in a hurry!!!!!

Just worked out the mortgage itself would increase by a further £9.39 so a total increase of £12.82 which because I have worked on rounded numbers equates to approx 2.5% increase in my payments! I think!

So if both yours and my figures are correct this must mean the percentage increase in payments is dependent on the amount borrowed? Hmmmmm!!!!

if you go to the '2013 mfw' thread there is a speadsheet that you can download that works out overpayment benefits, term reductions etc

lennonc1

Oh jimmy give it up eh! You cannot stop people pursuing this, we might after all not get our way but at least we have tried to stand up for our rights.

Evenfields

geeka wrote: »

Thanks for the answer.
There were 3 sep loans all under 25k. they were taken out in 2004 and 2005.
My statement says regulated by the FSA. It's all v confusing.
I have written and complained to NRam and they are still looking into it. had 2 letters off them saying they need more time.
Think im non standard thats why they havent given me a straight answer.
Any ideas?

Hi there,

If your loans were taken out in 2004 & 2005 and the amounts taken out were originally all below 25k, even if they were secured they would have been covered by the CCA. I presume they were linked to the Together product? Did you get one loan and then get two further advances?

The only difference which is why I presume your statements mention it, is as I posted before, the rules changed in 2012 to bring Secured loans under the regulation of the FSA. However, any loans taken out before 2012 (don't have exact date) will have in effect dual regulation i.e. both CCA and FSA will regulate them. The law of CCA will still apply.

The reasoning behind it I believe is that as Secured Loans are secured on property, they wanted to bring them more in line with residential mortgages which have always been regulated by the FSA.

As I understand it, Secured loans were also involved in the statement mistake.

So fingers crossed eh!

BTW do your agreements say Fixed Sum Loan regulated by the Consumer Credit Act?

chips78

dear jimmy, lemmon

shhhh

lennonc1

I am trying to do what I can here for people and am constantly being pestered, it is causing all the original posters to contact me via pm and is giving me a lot more work in helping people, I want to post here but is becoming very difficult now.

cot1198

lennonc1 wrote: »

I am trying to do what I can here for people and am constantly being pestered, it is causing all the original posters to contact me via pm and is giving me a lot more work in helping people, I want to post here but is becoming very difficult now.

Don't let him get to you, ignore his posts as they are full of false information and designed to get people going. He needs fuel for his fire. Stay cool:cool:

geeka

I can't find my original offer letter so not sure if it was a together mortgage. Again not sure, NR were just chucking money at me and I took it! silly really. I'll wait and see what they say, fingers crossed. Appreciate you taking time to reply. I'll keep everyone informed of what happens.
Tim

Evenfields wrote: »

Hi there,

If your loans were taken out in 2004 & 2005 and the amounts taken out were originally all below 25k, even if they were secured they would have been covered by the CCA. I presume they were linked to the Together product? Did you get one loan and then get two further advances?

The only difference which is why I presume your statements mention it, is as I posted before, the rules changed in 2012 to bring Secured loans under the regulation of the FSA. However, any loans taken out before 2012 (don't have exact date) will have in effect dual regulation i.e. both CCA and FSA will regulate them. The law of CCA will still apply.

The reasoning behind it I believe is that as Secured Loans are secured on property, they wanted to bring them more in line with residential mortgages which have always been regulated by the FSA.

As I understand it, Secured loans were also involved in the statement mistake.

So fingers crossed eh!

BTW do your agreements say Fixed Sum Loan regulated by the Consumer Credit Act?

drussmonkey

cot1198 wrote: »

Better than I got from NRAM.

I put two complaints into NRAM and still could not get a satisfactory answer from them. So I complained to the FOS, it is still with them now.

Very poor. Over the last few months I've had enough FOS booklets to start a book shop.

Their response to my complaint has been slow coming but it was comprehensive when it arrived. Maybe it's something about the demanding way I write my letters, I'm really explicit with all of the data, then whens and the whats, and very specific about what I want them to do to resolve it. I often bolden the text in the letters where I'm asking them to do things so that they can't fail to see it.

cot1198

drussmonkey wrote: »

Very poor. Over the last few months I've had enough FOS booklets to start a book shop.

Their response to my complaint has been slow coming but it was comprehensive when it arrived. Maybe it's something about the demanding way I write my letters, I'm really explicit with all of the data, then whens and the whats, and very specific about what I want them to do to resolve it. I often bolden the text in the letters where I'm asking them to do things so that they can't fail to see it.

Our fault really that we trusted them to put things right in good time with a decent explanation of what had gone wrong, we won't be doing that again.

To be fair we have not had a problem with NRAM/Northern Rock before but over the last 12 months, nothing but problems.

IainHL

tracy7 wrote: »

IainHL wrote: »

jimmy1000 wrote: »

on a seperate matter NRAM have told me that interest rates will be going up in the next three months by a further .35% which will hit us hard.

Where have NRAM told you this Jimmy? Who in NRAM told you? By what method?

If my memory is correct and my mortgage rate is 4.78% then this will repesent an increase of 7.3% in my monthly payments. Not good, but not devastating.

I'm not quite sure I understand what you mean by an increase in your payments of 7.3%? Surely a 0.35% (APR) increase is just that and could not increase your payments by 7.3% unless I'm completely missing the point of what you are saying.

I am on an interest only mortgage, therefore the whole of my monthly repayment represents interest, there is no capital element. If the interest rate is currently 4.78% and it increases by 0.35% it will go up to 5.13%. An increase of 4.78 by 0.35 to 5.13 represents a 7.3% increase from the base of 4.78.

To use some real numbers, let's say your interest only mortgage is £100k. The annual interest on that at 4.78% is £4,780, giving you monthly repayments of £398.33. If the interest rate goes up to 5.13% the annual interest increases to £5,130, and the monthly repayment to £427.50. The increase in monthly repayment is £29.17 (£427.50 - £398.33). This is an increase of 7.3% from your original payment (29.17 / 398.33 x 100).

If you are on a repayment (interest and capital) mortgage, then some component of your monthly repayments respresents capital, and the percentage increase in your monthly repayments will be lower.

Here ends today's arithmetic lesson!