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  • FIRST POST
    • d4rr3n
    • By d4rr3n 13th Jun 19, 10:48 PM
    • 33Posts
    • 1Thanks
    d4rr3n
    Gut feeling I paid off my mortgage but I am still paying!
    • #1
    • 13th Jun 19, 10:48 PM
    Gut feeling I paid off my mortgage but I am still paying! 13th Jun 19 at 10:48 PM
    Purchased a house back in the winter of 2001 and been with the same small bank ever since making monthly payments.

    The original mortgage was for a period of 20 years. I obviously have been paying it off at a much more rapid rate since the rates have dropped.

    I have a gut feeling I have paid off my mortgage by a significant amount.

    I know others who are members of this small bank (has perhaps four branches in the UK) and they are not known for being honest!

    I need to get a professional to look into this and do the maths. Any suggestions?

    I searched mortgage investigator but all I could find was fraud on the side of the customer not on the side of the bank.
    Last edited by d4rr3n; 13-06-2019 at 10:54 PM.
Page 2
    • d4rr3n
    • By d4rr3n 14th Jun 19, 1:36 PM
    • 33 Posts
    • 1 Thanks
    d4rr3n
    There's going to be some significant accrued interest from when you reduced the payments below the contractual ones.

    What sort of mortgage was it? You said it was variable, but you also mention the base rate which suggests it was a tracker. What was it and what is it now?
    Originally posted by zx81
    It actually doesn't say what type of mortgage it is other then I am paying off at 2% above bank base rate though my repayments have stayed the same other then when I requested the reduction in 08
    • d4rr3n
    • By d4rr3n 14th Jun 19, 1:41 PM
    • 33 Posts
    • 1 Thanks
    d4rr3n
    need more details because something looks wrong at the start

    more accurate base rate changes
    https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp
    Originally posted by getmore4less
    The info I gave is correct I took it straight of the original mortgage agreement.
    • d4rr3n
    • By d4rr3n 14th Jun 19, 1:46 PM
    • 33 Posts
    • 1 Thanks
    d4rr3n
    OP - regardless of any BOE base rate drop your 20 year mortgage will still take you 20 years to pay off unless you paid more than your contractual monthly payment.
    Originally posted by BoGoF

    Not as I understand it. If your monthly repayments stays the same yet the BOE base rate drops then I am paying the loan off faster.

    What you say would be correct if my monthly repayments continuously increased and decreases with base rate but thats not the case.
    • getmore4less
    • By getmore4less 14th Jun 19, 1:52 PM
    • 37,368 Posts
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    getmore4less
    The info I gave is correct I took it straight of the original mortgage agreement.
    Originally posted by d4rr3n
    Not if it is a base +2% tracker at the start.
    • getmore4less
    • By getmore4less 14th Jun 19, 1:58 PM
    • 37,368 Posts
    • 23,058 Thanks
    getmore4less
    There's going to be some significant accrued interest from when you reduced the payments below the contractual ones.

    What sort of mortgage was it? You said it was variable, but you also mention the base rate which suggests it was a tracker. What was it and what is it now?
    Originally posted by zx81
    No accrued interest the payments always covered that,

    capital payments may have been slow for a bit but would have soon caught up

    Needs the details, simple calculations with the correct data.
    • getmore4less
    • By getmore4less 14th Jun 19, 2:55 PM
    • 37,368 Posts
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    getmore4less
    Is this the let property?
    • d4rr3n
    • By d4rr3n 14th Jun 19, 3:46 PM
    • 33 Posts
    • 1 Thanks
    d4rr3n
    Not if it is a base +2% tracker at the start.
    Originally posted by getmore4less
    The exact wording "Interest: The Bank Base Rate (varying) + 2% per annum charged quarterly in arrears"


    Wondering if I can find an on-line calculator to do this, think it would churn out the answer in a few secs
    • Tigsteroonie
    • By Tigsteroonie 14th Jun 19, 3:57 PM
    • 23,366 Posts
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    Tigsteroonie
    Is there a possibility - it's just a thought - that although you were sold a "Base Rate + 2%" variable rate, it is logged on the bank's computer as "Base Rate at the time + 2%" i.e. 6.75% fixed rate?

    Anyway, as others have said, what does your annual statement show? Mine shows every payment, then breaks that down into how much is interest and how much capital, then gives me a running total for the capital slowly going down.
    Mrs Marleyboy

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    • Fizzy11
    • By Fizzy11 14th Jun 19, 4:09 PM
    • 124 Posts
    • 301 Thanks
    Fizzy11
    If you go back to your original mortgage offer I’m convinced there will be caveat that says there will be a minimum interest rate you will pay regardless of whether the B of E Base Rate drops. This is the case for the majority of lenders but people generally don’t read all the mortgage offer paperwork.
    • d4rr3n
    • By d4rr3n 14th Jun 19, 4:10 PM
    • 33 Posts
    • 1 Thanks
    d4rr3n
    Is there a possibility - it's just a thought - that although you were sold a "Base Rate + 2%" variable rate, it is logged on the bank's computer as "Base Rate at the time + 2%" i.e. 6.75% fixed rate?

    Anyway, as others have said, what does your annual statement show? Mine shows every payment, then breaks that down into how much is interest and how much capital, then gives me a running total for the capital slowly going down.
    Originally posted by Tigsteroonie
    It says variable in the wording of my mortgage document so I dont see why it would be fixed.

    I dont get a detailed breakdown just how much is outstanding each month.

    Cant find a mortgage calculator that can be backdated, would have made it easy.
    • d4rr3n
    • By d4rr3n 14th Jun 19, 4:16 PM
    • 33 Posts
    • 1 Thanks
    d4rr3n
    If you go back to your original mortgage offer I’m convinced there will be caveat that says there will be a minimum interest rate you will pay regardless of whether the B of E Base Rate drops. This is the case for the majority of lenders but people generally don’t read all the mortgage offer paperwork.
    Originally posted by Fizzy11
    My original mortgage agreement is one and a half A4 pages single sided. It says nothing about minimum base rate.
    • getmore4less
    • By getmore4less 14th Jun 19, 6:03 PM
    • 37,368 Posts
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    getmore4less
    The exact wording "Interest: The Bank Base Rate (varying) + 2% per annum charged quarterly in arrears"


    Wondering if I can find an on-line calculator to do this, think it would churn out the answer in a few secs
    Originally posted by d4rr3n
    You will not find an online calculator to do that but is is a relatively simple to model in a spreadsheet.

    Would need a better definition of "quarterly in arrears"
    • getmore4less
    • By getmore4less 14th Jun 19, 6:05 PM
    • 37,368 Posts
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    getmore4less
    Post the details from your annual statements.

    Was this a let property?
    • elsien
    • By elsien 14th Jun 19, 6:20 PM
    • 19,851 Posts
    • 50,413 Thanks
    elsien
    At the risk of sounding like a broken record, what do your annual statements say.
    Have you been checking that they are correct?
    That's what you need to be looking at, not guesstimates and gut feelings. Gut feelings tend not to stand up in complaints processes.
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
    • Thrugelmir
    • By Thrugelmir 14th Jun 19, 6:36 PM
    • 64,798 Posts
    • 57,204 Thanks
    Thrugelmir
    At the risk of sounding like a broken record, what do your annual statements say.
    Have you been checking that they are correct?
    That's what you need to be looking at, not guesstimates and gut feelings. Gut feelings tend not to stand up in complaints processes.
    Originally posted by elsien
    With a repayment mortgage little capital is repaid in the early years. Back end of a mortgage is primarily capital. If payments were reduced at some point below the required level. This would have added additional months in terms of fully clearing the debt owed.
    “If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.”
    ― Niall Ferguson
    • busybee100
    • By busybee100 14th Jun 19, 6:48 PM
    • 1,332 Posts
    • 2,594 Thanks
    busybee100
    Hi

    I just want to add my experience from around 2009. My mortgage I thought was linked to the bank of England base rate but it turned out to be Barclays base rate. Previously they had run at the same rate but as the BoE rate dropped Barclays decided to keep theirs at a higher rate. Wondering if that is what's happened here.

    • scottishblondie
    • By scottishblondie 14th Jun 19, 8:23 PM
    • 2,116 Posts
    • 1,362 Thanks
    scottishblondie
    “The bank base rate” and the “Bank of England base rate” are not necessarily the same thing. If you are quoting direct from your paperwork then I don’t think your mortgage has been tracking at BOE + 2% but at the bank’s own base rate + 2%. To check if your payments have been correct you’ll need to ask the bank to detail the changes to their base rate over the time you’ve held your mortgage.
    • Fizzy11
    • By Fizzy11 14th Jun 19, 9:46 PM
    • 124 Posts
    • 301 Thanks
    Fizzy11
    My original mortgage agreement is one and a half A4 pages single sided. It says nothing about minimum base rate.
    Originally posted by d4rr3n
    But this is one of the most important things you’ll ever read & should be read.
    • getmore4less
    • By getmore4less 15th Jun 19, 6:46 AM
    • 37,368 Posts
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    getmore4less
    Thanks everyone, I cant put all the details here but the basics should be enough to get an idea if there is an overpayment.
    Originally posted by d4rr3n
    Going to need more information to get it more accurate but I can give it a go based on what you have said so far.

    Mortgage £470k.
    Term 20 years
    Start date Feb 02
    payment £3,564 per month.
    June 08 payment changed to £3359
    rate : base+2%

    IF I run that against the real base rate change dates using standard monthly amortization calculations

    It comes out that the mortgage would have been paid off in Feb this year

    But we know this mortgage started at 4.75% +2% and there is this quarterly in arrears whatever that means


    The base rate was 4.75% in Sept 01

    if we start with that and run with that lag on a base rate change

    we get a new paid off date of April this year 2 months later.

    if we knew what quarterly in arrears means we could try to model that.

    if there is a floor on the base rate say of 2%(4% min rate) that would mean amount owing now would be a round £25k-£30k

    which fits with your £27k

    You are going to have to dig out more details of the rates being used as small differences can make a big difference to how much is left today.

    Your last know rate would be a good start.
    Last edited by getmore4less; 15-06-2019 at 6:50 AM.
    • d4rr3n
    • By d4rr3n 15th Jun 19, 11:34 AM
    • 33 Posts
    • 1 Thanks
    d4rr3n
    “The bank base rate” and the “Bank of England base rate” are not necessarily the same thing. If you are quoting direct from your paperwork then I don’t think your mortgage has been tracking at BOE + 2% but at the bank’s own base rate + 2%. To check if your payments have been correct you’ll need to ask the bank to detail the changes to their base rate over the time you’ve held your mortgage.
    Originally posted by scottishblondie
    I did think that but others I suggested that to dismissed it saying a bank cant just make-up its own base rate out of thin air. I'm sure there must be some regulations in the UK preventing banks doing that. I always thought base rate meant BOE values.
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