Mortgage overpayment calculation advice 2 February 2020 at 7:31PM in Mortgage-free wannabe 4 replies 365 views

Diz_CPC

Wondering if anyone can help with a calculation. In June 2016 I returned to my home I'd been letting out for 2 years. Told my mortgage lender, Nationwide, I was no longer letting and asked them to return the mortgage back to owner occupancy versus letting rate (was being charged an extra ~£20 month for this).



Didn't notice until I got my recent statement they never did this, so I've been overcharged for 3.5 years. Now they want proof I moved back (despite sending all correspondence to my home address - where do these eejits think I live?). Fortunately I still have my council tax bill for 2016 as proof. Before I do battle I'd like a ball park figure in my head but compound interest isn't my strong point. What I do know is it's more than just 42 x £20.


Can Citizens Advice help with this? Or is there another independent body who can advise? And if anyone else has experienced this it would be great to hear how you resolved it. Thanks in advance!

Diz_CPC

I should have added, because I'd told them and expected it to be actioned, and the amount has fluctuated a little from time to time anyway, I wasn't paying close enough attention. My bad. I also lost my mum 2 years ago, making the relatively small amount less of a priority for a while before and after.



Other bills have defo been culled saving me over £££ per month.



Mortgage payment protection insurance: £35
Motorcycle insurance for two SORNed bikes: £30
Charity donations: £25
Mobile phone: reduced from £20 to £14
Parting with my ex 4 years ago: priceless, has saved me a small fortune...

julicorn

If you post your balance from June 2016, your two rates (both the one you should have been paying, and the one they continued charging you), and your remaining mortgage length (either now or ideally at the time, June 2016), then it shouldn't be too difficult to work out.

Diz_CPC

Thanks Julicorn. Slightly tricky as I get my statement in January and moved back home in June. I also withdrew £200 of overpayments in 2016 for an emergency, and have been on the standard variable rate as the last time I looked into that changing looked like it would cost more than it would save with such a relatively short term left - both of which muddy the waters a little.

As of January 2016 I owed £32475 over 6 y 11 mo paying £446 per month on a rate of 3.5%, which was an additional 1% on the standard owner rate. Prior to that the rate was 2.5% interest with a payment of £425 per month.

I currently owe ~£14.5k. I understand that the less you owe the more the payment goes towards capital rather than interest, I just don't know how to calculate this.

Grogged

I think their online banking tells you the rates in use that year and you can go a few years back.
An alternative would be to use the MSE mortgage calculator, running it once at the old rate and once at the new one.  Whilst not 100% accurate it should give you an idea of what's owed.