Confused by info from bank about interest rate and repayments

System

This discussion was created from comments split from: Mortgage Annual Statement - Interest and Repayment of Mortgage.

MissTazim

Hi 
can anyone help me?
I have just lowered my interest rate on my mortgage but my bank is claiming my payments have gone up each month than previously? Is this right?

Edi81

MissTazim said:

Hi 
can anyone help me?
I have just lowered my interest rate on my mortgage but my bank is claiming my payments have gone up each month than previously? Is this right?

Nowhere near enough info. 

Old rate term and payment?
new rate, terms and payment?
Amount outstanding? Have you paid a fee?
lender?

eschaton

As already said, it depends where you are on your mortgage journey and interest rates. 

Early part, you’re mostly paying interest and the rest capital repayment. 

Later part and it’s the opposite. 

 

At the beginning on the year I had 6.5 years to go and around 35% of my payment was still interest. With rates increasing as they did, my interest went from about £45pm to £200pm as I was on a BR +0.99% tracker. 

When you work it out and I saw that I was paying around £2400pa in interest, that motivates you to pay it off. 

At the same time, if I had just started the mortgage, I’d be paying over £6800 a year in interest. 

kingstreet

MissTazim said:

Hi 
can anyone help me?
I have just lowered my interest rate on my mortgage but my bank is claiming my payments have gone up each month than previously? Is this right?

Tell us how you have achieved that in the current climate? All I'm doing at the moment is telling people about rate increases.