I am so angry

michellefromessex

Received letter dated 29th Feb from mortgage company advising that as of 1st March our interest rate had dropped (libor rate so first reduction for a long long time) and that the new payment amount would come affect as of the March DD (today). On checking my bank this morning I noticed that they had tried to take the old amount (£85 more) and this put me overdrawn (account only used for mortgage so we pay just the correct amount plus a few extra pound in) rang bank and they have stopped the DD for me to save me incurring £38 charge.

Just rang mortgage company and they are telling me that this is correct and that the rate does not change until 1st April and its my April DD payment that will be reduced, I argued until I was blue in the face with them and they just keep saying that the letter means that it takes affect from April, I said why would you send me a letter dated 29th Feb for a payment coming out end of April (nearly 8 weeks later) anyway they wont back down and tomorrow once funds back into my account plus the extra I now have to go and pay in, I have to make a card payment to them for the higher amount, I know being on a libor rate stinks, but jesus when they were putting the interest rate up it happened the month they sent the letter (roughly every three months). I have told them that they are wrong but at the end of the day where do I stand on this?

beecher

What does the letter actually say? Does it give today's date? Maybe you could quote what it says?

minimike2

You need to check the T&C of the mortgage - but the letter only says the interest rate dropped from that date....there may still have been interest accruced to pay on the higher rate, resulting in the larger payment in March. Sounds like they are right to me im afraid.

How long have you been paying the higher rate for? if you can afford to and the mortgage allows overpayments, why dont you carry on paying the higher amount...will put a nice little dent in the mortgage balance overpaying that much.

Noz

It really does come down to what the letter actually states

chappers

minimike2 wrote: »

You need to check the T&C of the mortgage - but the letter only says the interest rate dropped from that date....there may still have been interest accruced to pay on the higher rate, resulting in the larger payment in March. Sounds like they are right to me im afraid.

How long have you been paying the higher rate for? if you can afford to and the mortgage allows overpayments, why dont you carry on paying the higher amount...will put a nice little dent in the mortgage balance overpaying that much.

Absolutely, depends what it says in the T&Cs. I have a LIBOR mortgage and it says the LIBOR setting date is the last working day before each of 1 Feb, 1 May. 1 August and 1 November and will affect payments made in the following month .
In practice what happens is my mortgage rate is set based on the LIBOR rate of 31 Jan, 30 April, 31 July, 31 October(or the nearest working day before) and affects my payments at the end of February, May, August and November, I would have thought yours would be the same. The change is every 3 months due to your mortgage being linked to the 3 month LIBOR.

Be careful making overpayments, they may not be allowed, my commercial mortgage doesn't allow them over £50, a while ago due to a mix up I overpayed by £200 and they charged me the early redemption penalty interest of 6%

michellefromessex

thankyou I will hunt out out t&c in a while to check, I do not wish to make over payments as tbh the payment amount has increased by nearly £400 a month over the last two years and its a relief to see it start to drop down again.

The letter word for word exactly is as follows:

In accordance with the terms and conditions of your mortgage we write to advise you of an amendment to the interest rate that applies to your account (less any discounts as appropriate)

The interest rate for your account will be *** from 1st March 2008.

The revised monthly payment (including any applicable insurance premiums) of £****** will be collected by direct debit on the last working day of each month with effect from the end of March.

If yopu have a current DD instruction, your new monthly payment will be collected from the last working day of this month. However if your dd is suspended or cancelled you will need to make alternative arrangements for payments.

THE LETTER IS DATED 29TH FEB 2008

merlinthehappypig

michellefromessex wrote: »

The revised monthly payment (including any applicable insurance premiums) of £****** will be collected by direct debit on the last working day of each month with effect from the end of March.

Unfortunately, as the letter says the end of March you aren't going to get anywhere with a complaint, despite the date of the letter.

beecher

Well that does sound like they've made a mistake. I'd phone back and if you get the same response ask to speak to a manager. Don't argue with them about the date the letter was sent out on, just focus on the fact it states 1 March and that it specifies that the new payment will be collected on the last working day of this month, ie March.

Good luck.

michellefromessex

merlinthehappypig wrote: »

Unfortunately, as the letter says the end of March you aren't going to get anywhere with a complaint, despite the date of the letter.

But the mortgage it states with affect from 1st March and that if I have DD instruction in place the new monthly payment will be collected from the last working day of THIS MONTH.

beecher

michellefromessex wrote: »

But the mortgage it states with affect from 1st March and that if I have DD instruction in place the new monthly payment will be collected from the last working day of THIS MONTH.

That's certainly the way I interpret the letter - new amount should've been taken off at the end of March, not the end of April.

michellefromessex

Update:

Phoned this morning to make a card payment to them and they are adament its the old amount still until 30th Aprils payment, so I have paid them, I have arrears on the account (less than one month) so didnt want to rock the boat.

Also noticed this morning Natwest still charged me!