Confused by outstanding balance as shown by Woolwich
Bossypants
Posts: 1,273 Forumite
This is probably a stupid question, but I can't figure it out and was hoping someone could shed some light on it.
In November 2016, I took out a mortgage of £235,000 over 30 years with Woolwich. I am now fully settled into my new home and would like to start over-paying on the mortgage, so I requested a current balance figure, just to know where I currently stand. The figure provided confuses me, however. It's £232,612, which, even taking into account that it includes interest accrued for the month, surely is too high? As far as I can tell, I should be repaying £7,833 capital per year in order to repay the full balance over the 30 year term, which means that, eight months in, I should have repaid £5,222 in capital so far.
I'm sure I'm missing something, please could someone help me work out what it is? My last lender used to show the outstanding capital balance only, with interest being shown simply as a deduction on the account (i.e. I would make my monthly payment of £500, then they would subtract £150 in interest), so the whole daily interest calculation thing is throwing me a bit.
In November 2016, I took out a mortgage of £235,000 over 30 years with Woolwich. I am now fully settled into my new home and would like to start over-paying on the mortgage, so I requested a current balance figure, just to know where I currently stand. The figure provided confuses me, however. It's £232,612, which, even taking into account that it includes interest accrued for the month, surely is too high? As far as I can tell, I should be repaying £7,833 capital per year in order to repay the full balance over the 30 year term, which means that, eight months in, I should have repaid £5,222 in capital so far.
I'm sure I'm missing something, please could someone help me work out what it is? My last lender used to show the outstanding capital balance only, with interest being shown simply as a deduction on the account (i.e. I would make my monthly payment of £500, then they would subtract £150 in interest), so the whole daily interest calculation thing is throwing me a bit.
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Comments
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If you took the mortgage via a broker, then they may have sent you a deal illustration including a payment schedule, which shows how your balance is reducing over the 30 years and what portion of your monthly payments is reducing the capital and thus what your balance is expected to be 8 months on.
If you didn't get such an illustration, there are still plenty of calculators on the internet which will show you the above, so you can check it quickly. You'll need the original loan amount, the arrangement fee you added, the interest rate and the term.I am a Mortgage BrokerYou should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
look up amortization
£7,833 capital per year would be for 0% interest.
as the interest rate goes up so do the payments and for them to stay the same throughout the full term as the interest goes down you pay less capital in the early years.0
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