Calculation of Impact of drop in ECB rate

[Don_08]

Our November payment has just gone out of our account, and has been reduced for the decrease of 0.5% in the ECB as per our tracker.

Though not by as much as I thought.

Can anyone help me with my calculations and let me know where I am going wrong.

This is the mortgage payments only - TRS credited seperately to our account. The first mortgage repayment was Oct 08.

Oct Payment - Repayment Mort of €276k, Amount was €1,476 ( 4.7% int), Interest Only Mort of €60k, amount was €235.

So I expected a drop of €115 for the repayment mortgage ( 276,000 X 0.005 / 12) and a drop of €25 for the interest only mortgage.

Yes to the €25 drop so looks like full ECB drop was passed on - but only got an €80 drop in the repayment mortgage.

I would have thought the repayment part of the loan would have been the same in Oct and Nov, or very little difference. So the difference between the two payments should be the difference in interest rates.

I phoned AIB and they could not help me at all - in the end gave me the address of someone to contact - but before I put pen to paper, just wanted to check was I missing something obvious.

 

[marshmallow]

Would the term of your mortgage be making a difference maybe?
Try working it out with Karls Mortgage calculator http://www.jeacle.ie/mortgage/

 

[dieter1]

If you look at your original loan offer there should be a part that says something like

'effective on amount of installment if interest rate goes up 1%'

you should be able to work it out from there......

 

[DerKaiser]

http://www.askaboutmoney.com/showthread.php?t=95779
Basically the repayment mortgage is costing you €115 less pm now due to the interest rate fall but the impact of this reduces over the term of the mortgage so the reduction you received in your repayments reflects the average savings over the entire term expressed as a flat monthly amount over the entire term