Fixed Rate repayment Gone up while i am in it??

D

deeheg

Registered User
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84
Hi,

I am coming out of interest only period, however, last year i did for one month and the repayment was 1341.88, they let me do interest only for one more year and now have been advised that repayments are 1368.81, I have two years left of the fixed rate,but dont understand how this happens and the customer service guy said its to do with the time?? Can anybody explain this to me or shed some light

thanks
 
Re: Fixed Rate Gone up while i am in it??

When you go on interest only - you are not paying the capital back . The longer you delay paying back capital - the higher the repayments will be in order to catch up.
Example - 25 yr mortgage - 1 yr interest free - becomes a 24 yr repayment mortgage.

But Going interest free for 2 years means you will have just 23 years to pay back the capital - so theh repayments will have to be bigger to cater for that.
I'm amazed that this wasn't explained to you when you went interest only!
 
Re: Fixed Rate Gone up while i am in it??

Hi thanks I was given a figure for when repaying both back capital and interest, however, that amount has gone up, but it was fixed that is the part i dont get? I wasnt informed of it going up and sorry but dont know what TRS is but thanks, i have asked them to write out to me to explain
 
Re: Fixed Rate Gone up while i am in it??

Like I said before - it is to do with the lenght of time you have been on "interest only". The longer you stay on interest only - the less time you have left to pay off the capital - so the monthly repayments are higher if you come off interest only after 2 years instead of after 1 year. This will happen on a fixed rate too.

www.*****************.com
 
Re: Fixed Rate Gone up while i am in it??

thanks irishlinks, thanks for the website link its very good,
 
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