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  • FIRST POST
    • shinypenny
    • By shinypenny 5th Mar 18, 2:39 PM
    • 19Posts
    • 3Thanks
    shinypenny
    Annual interest charge. Suspiciously low?
    • #1
    • 5th Mar 18, 2:39 PM
    Annual interest charge. Suspiciously low? 5th Mar 18 at 2:39 PM
    Hi all,


    I've just received my annual mortgage statement and I'm astounded at the interest charge. It's so LOW!! Is this a mistake?


    Balance of 104,000 paying 2.44% interest. Just into year 3 of a 5 year fix.


    My interest charge for 2018 is/was 450.
    Last year it was 2,650 on a 114,000 balance and the year before 3,000 on a 120,000 balance.


    Last year I managed to pay 4,500 in additional payments (combination of extra 150/mth payment and a small inheritance). Has this really made SUCH a difference to the interest charged or is it a big mistake?


    (I've a bottle of bubbly on ice for when it drops to 100,000 so this might get opened sooner rather than later!)


    If it is a mistake, how long until the mortgage company realise?
Page 1
    • silvercar
    • By silvercar 5th Mar 18, 2:59 PM
    • 37,308 Posts
    • 157,166 Thanks
    silvercar
    • #2
    • 5th Mar 18, 2:59 PM
    • #2
    • 5th Mar 18, 2:59 PM
    So your mortgage is a bit over 100,000 and the interest rate is 2.44%, so you would expect the interest charged to be a bit over 2,440 for the year. You were charged 2,650. So it looks about right without even using a calculator. Why are you surprised?
    • Typhoon2000
    • By Typhoon2000 5th Mar 18, 3:05 PM
    • 861 Posts
    • 420 Thanks
    Typhoon2000
    • #3
    • 5th Mar 18, 3:05 PM
    • #3
    • 5th Mar 18, 3:05 PM
    So interest is about 211 per month and we have had a little over 2 months in 2018.
    • AnotherJoe
    • By AnotherJoe 5th Mar 18, 3:14 PM
    • 9,607 Posts
    • 10,684 Thanks
    AnotherJoe
    • #4
    • 5th Mar 18, 3:14 PM
    • #4
    • 5th Mar 18, 3:14 PM
    When you say My interest charge for 2018 is/was 450. what do you mean?Is that just for Jan and Feb 2018? Or do you mean for the 12 months up to and including Feb 2018?
    • Tom99
    • By Tom99 5th Mar 18, 3:22 PM
    • 2,260 Posts
    • 1,529 Thanks
    Tom99
    • #5
    • 5th Mar 18, 3:22 PM
    • #5
    • 5th Mar 18, 3:22 PM
    2 months interest so far this year so 450 sounds about right but you will still have to pay the next 10 months of 2018.
    • shinypenny
    • By shinypenny 5th Mar 18, 3:25 PM
    • 19 Posts
    • 3 Thanks
    shinypenny
    • #6
    • 5th Mar 18, 3:25 PM
    • #6
    • 5th Mar 18, 3:25 PM
    Thanks for the replies.


    Just to confirm:


    The mortgage was opened in January 2016
    Starting balance - 120,000
    Interest charged - 3,000
    Payments made in 2016 - 8,800


    Balance as January 2017 - 114,000
    Interest charged - 2,650
    Payments made - 12,600


    Balance as January 2018 - 104,000
    Interest charged - 450.


    As I've paid 3 monthly mortgage payments now in 2018 my balance as of 01 March 2018 is 101,800.


    All my statements are the same detailing the opening balance, the total interest charged and the monthly repayment amounts. What's confusing me is that 450 is so much lower than 2k.
    • Tom99
    • By Tom99 5th Mar 18, 3:37 PM
    • 2,260 Posts
    • 1,529 Thanks
    Tom99
    • #7
    • 5th Mar 18, 3:37 PM
    • #7
    • 5th Mar 18, 3:37 PM
    All my statements are the same detailing the opening balance, the total interest charged and the monthly repayment amounts. What's confusing me is that 450 is so much lower than 2k.
    Originally posted by shinypenny
    Its because the 450 is 2 months interest not 12 months. The mortgage co cannot tell you the amount of interest in 2018 until the end of the year when all your payments, including any overpayment, have been made.
    • shinypenny
    • By shinypenny 5th Mar 18, 4:04 PM
    • 19 Posts
    • 3 Thanks
    shinypenny
    • #8
    • 5th Mar 18, 4:04 PM
    • #8
    • 5th Mar 18, 4:04 PM
    Okay - thanks, that makes sense.
    I'll double check at beginning of April but thanks to everyone for taking the time to respond.
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