Direct line overpayment on mortgage does not seen right. We still owe despite overpaying 100 a month

cameronboy

To be fair lookingat the advert for overpayment i can see why you have concerns Advert for Directline Mortgages broadcast on Channel 5 in the UK.       https://www.youtube.com/watch?v=hAa8K29caHc

graylinghunter

If you paid just the minimum payment, you would have paid between 28th July 2009 until the 28th May 2020 a total of £63,017.28 between those dates and the balance on your mortgage as at 28th May 2020 would be £3,289.57. From 28th June 2009 until 28th December 2020 if you paid just the minimum payment you would have paid between those dates £66,346.42 to pay off the mortgage. From the 28th July 2009 until the 28th May 2020 you have paid a total of £64.147.36 between those dates and the balance on your mortgage as at the 28th May 2020 is £377.35. To pay off the mortgage on 28th June 2020 we would require a final payment of £378.50 Thank you... So i have paid 100 a month for 11 years and the difference between paying and no paying has been only £3.298   for approximately  £13200.....  can anyone explain?

getmore4less

Not without more information.
Try the details off your annual statements

graylinghunter

did ygraylinghunter said:

getmore4less said:

Not without more information.
Try the details off your annual statements did you see advert relating to my mortgage ref overpayment benefit 

graylinghunter

it maybe better going through a mortgage claim company let them do the research for us..

[Deleted User]

graylinghunter said:

it maybe better going through a mortgage claim company let them do the research for us..

Yes, that seems a much better idea than simply looking at your mortgage statements. 

davidmcn

Whatever the answer is, the money won't simply have disappeared into a black hole. Either it's reduced future payments, it's reduced the term, or you haven't actually overpaid.

getmore4less

graylinghunter said:

it maybe better going through a mortgage claim company let them do the research for us..

It is pretty easy to do if you go through your annual statements.
Mortgages are quite simple when you break them down
in most cases it is adding up(interest) and taking away(monthly payment)
Even on the annual level(balance at the start/end of each year you can get close, rates have not changed much in that last 10 years which makes it even easier.
Post some useful information here and someone can do look for any big errors.

graylinghunter

Thank you for calling the office on the 29th May 2020 regarding your Direct Line mortgage. I have investigated the account and will take this opportunity to explain the key points.

~ RBS

Ai~honned by the Pnjdential Regulation Asmsorfty and

the Pnjdential Regulation Authodly
regiated by the Finandal Conduct Authonty and

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• •

•

Mortgage drawdown 9~ November 2000 for £41 ,000.00

Mortgage term 20 years
1St part payment £106.21 on the 28.11.2000

1st full monthly payment £270.36 on the 28.12.2000

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•
•
• Phone call received from Mr P 13.07.2009.. notes recorded as follows ‘incall from

Official Term End Date 28.11.2020
Further borrowing of £12,500.00 on the 03.09.2002 Further borrowing of £20,000.00 on the 29.05.2003

Mr P looking at ways to reduce mortgage term, confirmed cannot tell customer

what to do — but gave customer options either overpay or make capital payments’
• Phone call received from Mr P  14.07.2009  notes recorded as follows ‘ incall Mr P. I advised balance as at last payment date £53,060.44, payment set at

£100.00 above minimum
• Phone call received from Mr P  30.06.2011 notes recorded as follows ‘ incall Mr

P, unhappy at rate rise, advised rate increase would increase term by 2 month

based on higher rate and current overpayment.’
• Phone call received from Mr P 18.10.2013 notes recorded as follows ‘incall from

Mr P I advised Mr P that he called to arrange overpayment to £100.00 above minimum on 14/07/2009 I advised term remaining 7 years and 3 months, I advised at 4.00% paying £518.55 term would reduce to approximately 7 years and 3 months Mr P. okay with this’

• Phone call received from Mr P 14.08.2017 notes recorded as follows ‘incoming call from Mr P advised balance £12,326.49, I advised if redeeming today £12,348.02, I advised term remaining 3 years 5 months and paying £100.00 over and above so paying £452.24 and at this rate could be repaid 2 years 5 months. Mr p will continue to pay £100.00 over and above, I advised no penalties for

redeeming early. ~~

• Phone call received from Mr P  08.10.2019 notes recorded P advised balance £2,628.09 and will redeem in 8

ManM 45 VI

nealnt ai o land: a

Mr

Line mortgages arepr&ded by

after the call I realised that from 28.10.2019 new minimum payment recalculated as £187.06 and £100.00 over minimum overpayment meant £287.06 from 28.10.2019, not previous direct debit amount taken on 28.09.2019 for £371.26. Therefore term at £287.06 will be 10 months. Phoned home telephone number to advise but no answer. Letter sent to confirm and ask if customer wants to increase payment to £371.26 to call office.

Phone call received from Mr P 28.05.2020 notes recorded as follows incall Mr P advised that mortgage will redeem in 2 more payments. Mr P thought this payment should have been the final payment as he has been overpaying for a number of years. I can’t see anything wrong but will order statements and have a look at them and will email them to him with any findings, I advised Mr P mortgage started November 2000 over 20 years. I have also advised that the term has reduced by 5 months.

• Phone call received from Mr P  29.05.2020 notes recorded as follows ‘incoming call from Mr P states has been overpaying £100.00 since 2013, I advised it was since 2009, I advised that the system recalculates every September and this Is based on current balance in September and always recalculates new minimum payment based on full remaining term so as customer overpaying by £100.00 this will bring minimum payment down and the customer will have saved on interest as overpaying but only way to shorten term is to have a specific set overpayment in place not an overpayment of £100.00 based on a ever annual changing minimum recalculated payment. I advised customer I will check how much interest customer has saved as a comparison of overpaying minimum payment by £100.00 and if the account didn’t benefit from a £100.00 over the minimum payment overpayment

• Spreadsheet from 2009 until now for both sub accounts completed using the 2 scenarios

Scenario 1 you have overpaid £100.00 over and above the yearly recalculated minimum payment every month since 28thi July 2009.

‘Due date’ ‘Minimum payment’ ‘Direct Debit payment’ ‘Total interest Charged for dates

28/07/2009 28/08/2009 28/09/2009 28/10/2009
Until 28/09/2010 28/10/2010

Until 28/09/2011 28/10/2011
Until 28/09/2012 28/10/2012

Until 28/09/2013 28/10/2013
Until 28/09/2014 28/10/2014

Until 28/09/2015 28/10/2015
Until 28/09/2016 28/10/2016

Until 28/09/2017 28/10/2017
Until 28/09/2018 28/10/2018

Until 28/10/2019 28/I 0/2019
Until 28/05/2020

£560.16 £660.16 £560.16 £660.16 £560.16 £660.16 £466.68 £566.68

£454.75 £554.75 £449.38 £549.38 £434.83 £534.83 £418.55 £518.55 £400.04 £500.04 £378.42 £478.42 £352.24 £452.24 £316.37 £416.37 £271.26 £371.26 £187.06 £287.06

£158.30 £162.04 £160.50 £1,788.52

£1,644.22 £1,570.95 £1,367.29

£1,166.21 £964.36 £764.63

£530.92 £371.10 £209.33 £45.74

So from 28/07/2009 until 28105/2020 total interest charged £10,904.11 Balance on mortgage as at 28/05/2020 showing £377.35

ManMI45 VI

Scenario 2 How the mortgage yearly recalculations, would have looked if there hadn’t been a monthly overpayment of £100.00 over and above minimum payment since 2&” July 2009.

‘Due date’ ‘Minimum payment’ ‘Direct Debit payment’ ‘Total interest Charged for dates

28/07/2009 £560.16 28/08/2009 £560.16

£560.16 £158.30 £560.16 £162.35 £560.16 £161.12 £469.29 £1,819.30

28/09/2009 28/10/2009
Until 28/09/2010 28/10/2010
Until 28/09/2011 28/10/2011
Until 28/09/2012 28/10/2012

Until 28/09/2013 28/10/2013
Until 28/10/2014 28/10/2014

Until 28/09/2015 28/10/2015
Until 28/09/2016 28/10/2016

Until 28/09/2017 28/10/2017
Until 28/09/2018 28/10/2018

Until 28/09/2019 28/09/2019
Until 28/05/2020

£560.16 £469.29

£468.38
£476.38
£476.50 £476.50 £476.48 £476.48 £476.48 £476.48 £476.48 £476.48 £476.50 £476.50 £473.26 £473.26

£476.89 £476.89 £477.12 £477.12

£468.38 £1,719.32 £476.38 £1,693.70 £1,527.34 £1,357.74

So from 28107/2009 until 28/0512020 total interest charged £12,686.26 Balance on mortgage as at 28/05/2020 would have been £3,289.57

Therefore by overpaying £100.00 over and above the annual review yearly recalculated minimum payment you have saved (~12,686.26 -£10,904.11) £1,782.15 in interest charges. Total actual total overpayment is £1,130.08 based on what was actually paid against comparison with scenario 2.

From 28/7/2009 until 27/09/2016 the total mortgage overpayments made by you were £4,891.92 based on what you had actually paid against what you would have paid if the account didn’t benefit from a £100.00 overpayment. However under scenario 2 from 28/10/2016 the actual minimum payment from here onwards for the first time would actually have been more than what you were actually paying each month.

On 28th October 2016 the minimum payment would have been recalculated to £476.50 if there hadn’t been a £100 overpayment on the account, and the actual direct debit collected in 28/10/2016 was £452.24. Therefore from 28/10/2016 until 28/05/2020 the amount you paid each month was less than the amount we would have requested from you if you hadn’t previously chosen to overpay by £100 above the minimum so from this time onwards you actually paid a total of £3,761.84 less than if the mortgage had ran under scenario 2.

Overall from 28/07/2009 until 28/05/2020 you have overpaid by £1,130.08 comparing the 2 scenarios

I have enclosed a copy of the letter sent to you on the 81h October 2019 for your records. ManMI45 VI

£1,180.11 £996.06 £751.66 £594.62 £417.39 £147.25

graylinghunter

If you read above please also look at advert i posted made by direct line applicable to my mortgage especially bit about overpayment...Directline Mortgage Advert On Channel 5 UK TV 2001 ...www.youtube.com › watch