Help - Mortgage payment increase weekend payments

Moneytree_3

Still does not explain why for the past 3 years I have not had any increase in the monthly payment amount based on accrued interest and now they are putting my monthly payment amount up?

JimmyTheWig

Dave_the_Ginger_Cat wrote: »

Some systems make the assumption that it will arrive on the due date in calculating future payments, and some make allowances for bank holidays and weekends.

Moneytree wrote: »

Still does not explain why for the past 3 years I have not had any increase in the monthly payment amount based on accrued interest and now they are putting my monthly payment amount up?

It sounds to me like they used to calculate based on the payment arriving on the due date and now they make allowances for weekends and bank holidays.

Moneytree_3

Can they change the terms though without you agreeing to it???

Thrugelmir

Moneytree wrote: »

Thrugelmir - Is it common practice for banks to increase monthly payments to allow for payments that fall on bank holidays?

Interest is calculated and charged on a daily basis. Lloyds system works in real time. So interest charges can be calculated precisely.

Halifax was a Building Society. So never had the computer systems with the sophistication of the banks. So the calculation would have made on an assumed forecast payment date not the actual day of receipt.

Thrugelmir

Moneytree wrote: »

Can they change the terms though without you agreeing to it???

There's been no change.

This is the downside of same day transfers. Banks have to pay interest on deposits so correspondingly will charge it on loans.

Goldiegirl

You were given your original monthly payment on the assumption that it would be received on the same calendar date each month.

However, in some months, the payment has been received a day or two late because the due date falls at the weekend or on a bank holiday.

This has had the effect of changing the original assumptions at the start of the mortgage - a slightly different amount of interest has been charged than was thought at the start of the mortgage.

There has been no reason for the Halifax to recalualate the monthly payment over three years, so the small variations in interest charged have built up.

Due to the systems change, they have now needed to recalculate your monthly payment. To repay the mortgage within the original term, the debt is slightly higher at this point than the computer assumed at the start of the mortgage, due to the small variations in interest charged.

Therefore to pay your mortgage off in the original term, your monthly payment is now slightly higher.

You would have had to address this point at some time. If the situation carried on to the very end of mortgage, you would have a small amount outstanding on the mortgage after your last payment due to all the small variations in the interest charged over the whole term of the mortgage

Goldiegirl

Forgot to add, re the 5p in the sub account...... They could go back to the start of the mortgage to review everything that has happened, to find out what caused the 5p balance....... But for the sake of 5p, I don't think they would be willing to do this

Moneytree_3

Willing or not, I will get the answer to my query

Well, I think it's all lip service, frustrating thing is I've shortened my term by 4 years in the past year and been overpaying for past 18 months so its annoying to suddenly out of nowhere to be charged more...

I'm going to switch providers, plenty of better deals out there.

That will lead me to my next thread search around how much to value my house at... Purchase price, zoopla range (lower or higher end of scale) or another method...

Thanks for the advice everyone.

Still think Halifax need to admit they are at fault for not accurately providing information on my mortgage account.

I will see what the letter says from them.

Moneytree_3

One thing to add is the mortgage call centre manager said it was my own banks fault that the payments are not received on weekends and bank holidays not theirs, I will be checking this out as well

Dave_the_Ginger_Cat

Reflecting on this topic, banks have always made assumptions on precisely when payments would be recieved

Typically recalcs are carried out every time a key event happens in a mortgage, which used to take place on a regular basis with interest rate changes. As we've been so flat for so long (see below), accounting triggers have generally not refreshed payments. It tends to be relatively low amounts, and I am not sure I would recommend anyone spends too much time on it unless there is a material difference.

The cost of providing this depth of customer service on queries is ultimately passed on to consumers. I can't think of a good comparison here, but not sure it's worth asking them to do this.

BTW, my sub account 1 relates to the product fee from when I took the mortgage in 2010, and it may be the residue from something similar.

Regards

Thu, 05 Mar 2009 0.5000
Thu, 05 Feb 2009 1.0000
Thu, 08 Jan 2009 1.5000
Thu, 04 Dec 2008 2.0000
Thu, 06 Nov 2008 3.0000
Wed, 08 Oct 2008 4.5000
Thu, 10 Apr 2008 5.0000
Thu, 07 Feb 2008 5.2500
Thu, 06 Dec 2007 5.5000
Thu, 05 Jul 2007 5.7500