Online calculator says we should be paying less

sgt_bilko_2

Earlier today I checked a couple online calculators to see how overpayment would affect the overall interest and time before clearing the mortgage. We have £88K outstanding at 5.34% and 21 years left to go on a 30 year repayment mortgage. There is 3 years left on this current deal.

According to the calculators I should be paying £581 a month but in practice Halifax are debiting £622 a month and it made me wonder if they are charging extra for something I don't know about...

Tomorrow I planned to call them but thought I would ask here first to see if anybody knows why there might be this difference in cost. We have been overpaying fairly regularly for the last 7 years and generally manage around £400 per month on top of the standard amount.

ACG

You have been overpaying.
In theory your balance should be higher than it is. If they reduced your payments your mortgage would still be over the same term. By keeping the payments the same, it helps to ensure your mortgage is paid off sooner.

sgt_bilko_2

Perhaps I didn't explain myself clearly enough. We are overpaying deliberately by a few hundred pounds per month and that part is fine. If we had been paying the standard amount since day one I think we would still owe well over £100K.

What I don't understand though is why the calculators say the standard sum (without overpayment) should be £581 with 21 years remaining at 5.34% but Halifax are actually debiting £622.

marcsshell

Mine at Santander said different to what I was paying but it would t allow me to put 14years 4 months so I had to choose 14 years.

ACG

When you set your payments up it worked out the repayments based on the rate and the term.

You have been overpaying. So you are still keeping up with your original payments, but it is now on a smaller balance as you have made overpayments.

If you put in what your balance was when you took it out, with therm when you took it out at the rate of 5.34% - I suspect that will come closer to the £622.

sgt_bilko_2

No doubt you are right but Halifax have already had to reimburse me on two occasions for previously overcharging so I am naturally a bit suspicious of them. I'll go through the figures carefully before I call them tomorrow.

laneycakes

Could it be for insurance? Or mortgage ppi?

Thrugelmir

Unless the interest rate changes. Halifax won't have revised your dd to take account of overpayments. They'll continue to continue to collect the same amount.

You need to look back at the balance when you originally took the fixed rate out. Not the balance you now owe.

Given that you want to make overpayments what's your concern? If you wish to check the figures. You'd be better off checking the interest calculation on your annual statement.

sgt_bilko_2

laneycakes wrote: »

Could it be for insurance? Or mortgage ppi?

That's what I am wondering. On one occasion previously I found they were charging me for home insurance even though I had cancelled it months before and gone elsewhere. They just forgot to stop charging me...

michelle2008

Do ring and check to put your mind at ease but as others have said this is most likely the result of your overpayments.

Your outstanding balance in lower as a result, but the monthly payments have not been adjusted. but don't panic this 'extra payment' is also paying off your mortgage.

If you are being charged for insurance or anything else this should be clearly identified - if you have online access to your mortgage account you could check this evening

sgt_bilko_2

Thrugelmir wrote: »

Unless the interest rate changes. Halifax won't have revised your dd to take account of overpayments. They'll continue to continue to collect the same amount.

You need to look back at the balance when you originally took the fixed rate out. Not the balance you now owe.

Given that you want to make overpayments what's your concern? If you wish to check the figures. You'd be better off checking the interest calculation on your annual statement.

Actually Halifax do occasionally lower the amount debited, even while the interest rate remains unchanged and have done so on at least 2 occasions already. They do this to manage the time when you end the mortgage. At one point we were paying over £700 per month.

I am happy to overpay the mortgage but just want to make sure they are not charging me for something else or at a higher interest rate than advertised. I don't have all the paperwork at hand now but I'll go through it all carefully tomorrow.