Beware Mickey Mouse Mortgages from Lloyds Bank

South_coast

I'm really not sure why you are continuing to post. I wish you well with your quest to prove that you are correct and everyone else is wrong, but I don't think anyone else is interested....

Analyst

You are in the wrong place then, because this whole site is about financial education, information and support. If you don't want any of that, then go elsewhere.

My only concern is that many vulnerable and financially illiterate people, are being ripped off, and it now seems that the organisation set up to defend them, is incapable of doing so. The right or wrong here is about the way the complaint is rejected, not the result. If you are not capable of defending yourself, how would you know if you were being fobbed off with a lie in order to meet a KPI target, bonus, or to hide a major error impacting thousands? I know of at least one similar case which was dismissed for no valid reason, and if I knew those people, I would tell them.

Think about how many thousands give up, for every one that takes the same complaint all the way.

Analyst

 
You can use the below to check your mortgage. Start with the first trigger event (usually an interest rate change).

Analyst

Lloyds Bank insist that these are the correct formulae, and we look forward to the day when they start using them.

Analyst

In simple terms, a mortgage or loan is calculated by adding the interest to the principal (the amount borrowed), and then dividing by the number of months, to get the monthly payment.

 

It follows that:

Term  = interest / average monthly interest = principal / average monthly principal payment

So T = log[ P ÷ (P - (I × MB)) ] / log(1 + I) can be simplified to

T = MB / P if interest is ignored. Interest does not change term.

Term = Mortgage balance / average monthly principal payment

 

You get the same if you calculate T = log[ P ÷ (P - (I × MB)) ] / log(1 + I) to near zero interest rates

“If the monthly interest rate I is exactly zero (i.e., a 0% interest mortgage), the original formula becomes undefined (division by zero in the denominator and indeterminate form in the numerator). However, the mathematical limit of this expression as I approaches 0 is simply: T = MB / P”

 

What this means is that the term cannot increase, because it is mathematically impossible, given the constraints of how a mortgage operates.

For example,

Term can increase if the balance increases, but the balance is always going down with a mortgage, because monthly payments are being made.


What Lloyds Bank have done is therefore impossible, unless they have made a serious error.

Every communication we have received from Lloyds Bank has increased that error.