Can someone tell me where my bank were getting their redemption figures from re my switch?

I have just completed a mortgage switch from a fixed 2.9% rate that had 2 years to go to a 2.15% rate for the next 5 years fixed on sum of €282,000 - the breakage fee was zero plus €2,000 cash back so happy days

Our solicitor made a request for a redemption figure in May and got sent a letter with a figure of €281.725.17. We then paid our June payment of about €1150 while we were waiting for the switch to go through.

After that June payment they told me over the phone that to the nearest thousand we still owed 282,000 which is all the information they will give over the phone - you need to request the redemption letter to get the exact figure. I thought that we’d be closer to €281,000 but what do I know and I didn’t request a redemption letter as I knew we were still a couple of weeks from drawdown.

So last week the funds were ready and my solicitor rang for the exact amount and they said they would send out a letter with amount which could take 7 working days. My solicitor didn’t want to wait anticipating that rates could change soon and managed to find out the balance on the mortgage through someone he knew personally in the bank which was €281,938.91 and so transferred over the money and he told me the switch was all done and dusted.

I rang the bank later in the week to make sure the life insurance policy attached to the mortgage had been cancelled and was told there was still €1300 approx owed on the mortgage and I shouldn’t have cancelled my July direct debit. I basically said this didn’t make sense to me and asked the guy on the phone to look into it and call me back with an explanation - but he never did. The redemption letter which my solicitor had requested before talking to his contact arrived in the post today and the figure they were quoting was €283,113.29 to clear the mortgage which I couldn’t understand - I’m no expert when it comes to this stuff - but is there any explanation as to where this figure could have come from?

So I rang them this afternoon to ask them and they told me that the loan was in fact completely cleared and they had sent out a letter confirming the same which should arrive shortly. How can they send me out a redemption letter asking for €283,113 and then clear the loan with €281,938?

And can the amount I owed in July, €281,938, be more than what I owed in May, €281,725 if I made a payment in June?

Would love if someone could help me make sense of this.

the redemption figure changes every day as interest is charged daily

Get a final statement from them and you will be able to follow the calculations.

Brendan

For whatever reason they also don't apply the direct debt to the redemption figure straight away.

For my own remortgage two months ago, UB refunded me over a full payment after we paid cleared the mortgage because the redemption figure they issued to the solicitor didn't include the payment we made a week before the request for the final figure.

Depending on timing the last monthly repayment may not be counted as they allow for it to be recalled or unpaid so often a refund of that payment amount weeks later.

Thanks for the replies.

I’m still a little at a loss to explain how my solicitor got a figure of just under 281,938 from someone in the bank and that now seems to have cleared the loan - and yet just a few days later we are receiving a redemption letter looking for €283,113 - like if the solicitor hadn’t got the lower figure from his friend I presume we would have just paid what was on the letter.

I guess it should become clearer when we receive final statement but I have to say I wasn’t impressed with the bank I was leaving - they made the switch as awkward as possible.

HI Truman

This seems standard across all banks and I don't fully understand why they can't look it up on the screen assuming there is no early repayment penalty due.

Monbretia said:

Depending on timing the last monthly repayment may not be counted as they allow for it to be recalled or unpaid so often a refund of that payment amount weeks later.

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This is a very good point which I had not heard before.

If they give the solicitor the goahead and the payment is recalled, it would be difficult to get the money back.

But the statement will make everything clear.

Brendan

Yes I can't remember the exact ins and outs of it but basically that's the reason, while the payment may have come from another account in the same bank and obviously not going to be recalled it's not always the case and the computer can't differentiate between where the payments come from. Same as lodging a cheque, might be drawn on another account of customer but computer just sees cheque and puts the clearing hold on it.

When i cleared our mortgage with Pepper( was Danske Bank), the process was very simple,

they told me check the mortgage statement balance online, inmediately after, my intended final monthly payment, and add a little, to more than cover, any interest accrued from that date, to redemption payment date, i paid this myself the balance + extra, and the excess, was refunded to me, a few days later, and solicitor got the deeds shortly afterwards.

Simple & straightforward