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

MovingForwards

@graylinghunter you have left your name in 14/07/09 bit.

Petriix

So they were reducing your regular payment every year to adhere to the original term. If that's not what you thought was happening then it's surprising that you didn't notice the payment getting smaller. You've still benefitted from overpaying but you would obviously have paid less interest in total if you had paid it off earlier; remembering that you would have had to pay more each month and you have presumably done other things with that money instead.

graylinghunter

I know when i requested to overpay i had done it with the advert in mind. So it appears I was placed on a different option that was not made clear. Their advert shows pay more if your flush and term will come down. Instead i have been put on another path even though i quoted the advert at the time and my reasons for wanting to overpay.....hence my frustration when I realised the full term in my mind should have been paid up as a result...

[Deleted User]

Rather than posting random chunks of unexplained transcript, is there any useful information you could tell us?

Why not just look at your statements?

graylinghunter

Deleted_User said:

Rather than posting random chunks of unexplained transcript, is there any useful information you could tell us?

Why not just look at your statements?

I have just located the statements will take a day or two to remove personal info them scan them thanks again all. the bits of info posted are the bits DL sent me to understand the overpayments i have made...

graylinghunter

Deleted_User said:

Rather than posting random chunks of unexplained transcript, is there any useful information you could tell us?

Why not just look at your statements?

ps my first computer was the zx80 in white 

Thrugelmir

graylinghunter said:

I know when i requested to overpay i had done it with the advert in mind. So it appears I was placed on a different option that was not made clear. 

Will be a natural consequence of the way lenders work. At every change of interest rate. The monthly repayment will be recalculated to repay the outstanding debt over the remaining term of the mortgage. Be obvious from the amounts you were paying.

I said as much in my post of 29th May. Lender has done nothing wrong.  

kaMelo

I think what's happened here is you stated you wanted to overpay by £100. At various points there has been a recalculation of the minimum payment to pay off the mortgage at the normal end date. The minimum payment was therefore lower than would have been if you hadn't been overpaying.
For example in 2009 you were paying £518, 2017 it was £452, and 2019 it was £287. Whenever this was recalculated it was done so to finish paying the mortgage at it's original end date. If you'd set a bottom line for your payments not to drop below rather than following the minimum payment then the term would have shortened more significantly..


Even so you will still have saved a boat load of interest so not really a loss.

getmore4less

graylinghunter said:

Deleted_User said:

Rather than posting random chunks of unexplained transcript, is there any useful information you could tell us?

Why not just look at your statements?

I have just located the statements will take a day or two to remove personal info them scan them thanks again all. the bits of info posted are the bits DL sent me to understand the overpayments i have made...

just post the mortgage
start and end amount 
total payments for the year and the rate(s) then a quick calc can be done to see if each year makes some sense.

getmore4less

going to try to extract the timeline from the jumble of stuff in the big post that seems to have messed up tables.
date event 
2000/11/09 £41,000 term 20years payment £106.21/£270.36  (that makes the rate around ???
2002/09/03 £12,500
2003/05/29 £20,000
2009/07/14 £53,060 (at last payment) payment  + £100
2011/06/30 (rate rise)
2013/10/18 term remaining 7y3m rate 4% 518.55 term 7y3m ?
2017/08/14 £12,326(redemption 12,348) term 3y5m payment +£100 £452.22 term 2y5m
2019/10/08 £2,628 term 8m
caller notes

payment due 2019/10/28
min payment £187.06 + £100=£287.06  term 10 months  not 8 months based on last payment of £371.26
letter sent  

2020/05/28 2 payments to go term reduced by 5 months
2020/05/29 
now the key bit is in that call

 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

That means every Sept(and possibly every rate change) the regular payment gets recalculated for full term and will be getting smaller due to the overpayments effectively making future overpayments smaller 
Next are the spreadsheets that are messed up so not going to try and reconstruct those.
The bit after those describing the difference needs looking at but without the data in a readable form not easy to understand properly.
I think it may be obfuscating the actual problem as they talk about underpayments which has not happened but the payment would have gone lower than if you had not been overpaying but that is due to the yearly refactoring back to full term..
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I will try to explain what that refactoring does with an example over a mortgage with full term  2 years
say we borrow 10,000 over 2 year @ 3% 
£10,000 3% £430 interest £315.36
Now with £100 overpayment  
£10,000 3% £530 interest £256.49 (paid off in 20months, 4 months early)
interest saved £58.87
now lets recalculate payment after year 1
Y1. £10,000 3% £530 interest £215.98
Y2 £3,856 3% £327+£100 interest £49.13 (paid off in 10 months 2 month early)
total interest £265.11 saving now £50.25
what they are also saying is that in Y2 you would have paid £427  not £430 that you would have been paying if you had not overpaid in Y1  
Now your mortgage seems to have done that every year.
You would only ever reduce the term by a few months in the last year,
At the refactor Sept 2019 with a payment of £187  +£100 would knock about 4 months off.
it would have been obvious from the statements that the regular payment had been going down, maybe not in the first few years As the reductions are relatively small but they get bigger the closer you get to full term.