# What Does Write Off Mean?



## Peter54 (25 Jan 2012)

I received my yearly mortgage statement in the post yesterday. 

Each month it has a small sum of money credited off my loan, with the words (Write Off) beside it.

Could somebody please tell me what this means and why they are writing off such small sums of money?


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## ClubMan (25 Jan 2012)

What lender?
Can you post some figures from the statement?
"Write off" is normally associated with a bad debt that a lender is giving up pursuing for one reason or another. I can't imagine that the lender is kindly reducing your mortgage capital balance on a unilateral basis so perhaps it refers to the capital payments that you are making which are chipping away at the capital balance? In the early years of a repayment/annuity mortgage you repayments are mostly interest charges and a relatively small amount of capital.

Does that clarify anything at all?!?


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## Peter54 (25 Jan 2012)

Thanks Clubman.  

The write off amounts are very small i.e 16.00euro.  The amounts vary each month.

Yes, I have a annuity mortgage but I have been only paying the capital amount.


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## ClubMan (25 Jan 2012)

Peter54 said:


> The write off amounts are very small i.e 16.00euro.  The amounts vary each month.


Have you queried it with your lender? Sounds odd to me.


> Yes, I have a annuity mortgage but I have been only paying the capital amount.


You mean you are on an interest free mortgage?!? That also sounds odd.


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## Brendan Burgess (25 Jan 2012)

Hi Peter

I have explained how mortgage repayments are calculated in this post.

I presume you are just paying the interest each month and not just the capital?

My guess, and it's only a guess, is that they are charging you some form of penalty interest, but as this is now illegal, they are crediting it to you.

I too would be very interested in knowing which lender it is as I doubt if it's just personal to you.

Brendan


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## Peter54 (25 Jan 2012)

Clubman, I suppose you could call it a token payment each month.  I am paying approx. 66% of the interest on my mortgage.

Thank you Brendan I will have a look at that post now.  Lender is Acc.


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## Peter54 (25 Jan 2012)

I have also just noticed there are descriptions such as (Operational Adjustment) for quite large sums of money.  They are credited in and then debited out??


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## 44brendan (25 Jan 2012)

The write-off sum is most likely the applicable element of "surcharge interest". However as bank's charge interest quarterly it is unusual to see the amount written off monthly. The fact that it is credited to your account means that at least it is indicative of a write-back rather than an extra charge (which as previously pointed out is not allowed). If surcharge is being applied to the account you should see 2 separate interest charges made quarterly. Is this the case?


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## Peter54 (25 Jan 2012)

Hi 44brendan , I hope this helps. (Interest Applied) is mentioned 4 times over the space of a year. These are for much larger sums.

No mention of (Surcharge Interest). Do they mean the same thing? My apologies for lack of knowledge in this area.


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## 44brendan (25 Jan 2012)

4 interest charges a year would be normal. You are not being charged any Surcharge (I.e. additional penalty interest) as ACC charge this separately. Contact the "ASU" dept of your Bank at Head Office and they should be able to provide you with an explanation.


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## Swyper (25 Jan 2012)

Peter54 said:


> Hi 44brendan , I hope this helps. (Interest Applied) is mentioned 4 times over the space of a year. These are for much larger sums.
> 
> No mention of (Surcharge Interest). Do they mean the same thing? My apologies for lack of knowledge in this area.



You should call the bank. No-one here will be able to give you a definitive answer, but it would be good if you could post what they say to this thread.


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## Kerrigan (27 Jan 2012)

Would like to hear the outcome of this also.  

Brendan44, why would the surcharge be charged seperately?  What does 'Operational Adjustment' mean?


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