Anyone else's mortgage payment gone up with the latest rate drop

mitchwh

Hi All

With the news of the rate drop, i waited patiently for C&G to send through the details of my new monthly payment. It dropped through the door yesterday, however, rather than the small decrease i expected (i have the .17% above base tracker with less than 2.5 years to go) - i get a 16GBP raise!
Speaking with C&G - apparently my last mortgage review was 2009 (when they specified the original monthly payment i have been dutifully paying since) and they need to make an 'adjustment'.
I am not in arrears, taken a payment holiday yet it would seem that they screwed up and now i have to pay more to clear my mortgage by June 2019.
I have pressed for an explanation, but computer is saying no, any thoughts on my options other than to pay?
Seems like it is not my fault they charged the wrong amount or failed to tell me the payment needed to change - so why should i have to pay the increased interest??

Thrugelmir

Your annual mortgage statements will provide you with an accurate picture of events. Lenders have always adjusted repayments at interest rate changes. As there's always been roundings in the calculations to be accounted for. So no they haven't screwed up just standard practice. Been an unusual period with no interest rate changes for so long.

getmore4less

At the last change in 2009

what did you owe
what was the rate
what was the date and end date of the term
What was the payment.

same details for the current change.

mitchwh

Hi there

April 2009 Owed 105,642.12 (this was after a capital repayment where we reduced the term to 10yrs 2months) - and left the monthly payment 883.33 - interest 0.17% above base therefore 0.67%

Change as of 1st Sept - Monthly Payment now 899.85 interest rate now 0.42% - amount owed (as per Experian on 7th Aug 2016) 31,274
So i have 34 payments at the new figure to complete repayment

getmore4less

£105642 @ 0.67% to pay off in 10years 2 months needed a payment of close to £896 that probably explains some of the shortfall

your balance now after 7y 4 months would have been be around £30100. with 2y 10 month to go.

You need your lender balance not Experian.

edit:
10y 3 months would be around £889 so more consistent with your original payment that could be another explanation the calculations have been done one side of a payment as +-one month would be in range.

rebel34racing

I had the same experience, interest dropped and payment went up by £21, phoned them , they said it was because of a 2 month mortgage break in 2013, raised a complaint and questioned how accurately the rest of my mortgage had been managed. they offered me £150 to close the complaint and told me there is nothing i can do about it. seeked advice on this forum, everyone took the side of the bank

vickyanne_2

We had the same letter and as we only have 2 yrs left on the mortgage it meant a £100 a month increase. I refused to accept it. It was due to a payment holiday we took but since then I had twice queried that it was included in the current payment and was assured it was.
I raised a formal complaint, got the £150 + telephone costs for distress and inconvenience and yesterday they paid over £2000 into our mortgage acct to rectify the situation so we are in the position we should have been had they not messed up and our payments stay the same.
Apparently they have used our case as an exemplar one and seemed desperate to resolve it and me not go to the ombudsman.
I'd say if you think you have a reasonable case don't be fobbed off and make a formal complaint.

rawrips

This is standard practise for a CMI to increase. It's just bad timing that they recalculated your CMI for the rate drop that it was picked up, but it happens.

If you've had a payment holiday or arrears during the past few years since your CMI was last recalculated that would explain why. What some lenders do is have the additional interest that gets charged on the arrears in a separate sub account; or they put the additional interest into your capital balance, so when they reoptimize the CMI, it will need to increase to cover your capital that will be higher than it had if there's been additional interest on the arrears.

(Note, additional interest is often charged even on late payments the standard interest rate).

amnblog

If Lender makes an error in calculation they are entitled to recoup it.

Similarly, if you had overpaid you would expect your funds back.

You could always tell them to stick their 0.17+ base.