mortgage arrears versus mortgage balance

[rodger]

Hello

I have seen this subject discussed but because I am personally affected I just wanted to clarify.

The bank has recently hiked repayments to include capital having given me interest only for 10 years.

The monthly repayments are approx 1650 of which 800 is interest.

However the mortgage balance is being increased by the full 1650 !!!

I don't understand this. I mean 1650 is arrears which is fine. But each month (cos I can't meet repayments) the "mortgage balance" is going up by €1650

What is going on here?

Thanks.

 

[Brendan Burgess]

Hi rodger

That does not make any sense.

Where are you getting the concept of "mortgage balance".

Forget the arrears for the moment. If you pay more than the interest charged, the balance on your loan, i.e. the amount outstanding, will fall.

Have a read of this and it will give you some useful background.

Brendan Burgess' guide to Mortgage Repayment Calculations

 

[rodger]

Brendan,

I agree it makes no sense. I am just looking at my online banking and I see the "mortgage balance" figure jump by 1650.

I already read the post you mention and I would expect my balance to jump by €800 (interest) if I don't meet my repayment but that's not what's showing up in my account online.

It's jumping by 1650: the full amount.

That's why I thought of posting this online.

I will write to them and ask them to explain.

Regards.

 

[WizardDr]

What Bank is it? If it is PTSB the mortgage statement is unintelligible.
If its BoI its straight forward.

 

[Brendan Burgess]

Hi Rodger

Are you looking at a statement or a figure in isolation?

It should be straightforward enough to check

If you are not making any repayments, they won't affect the balance due.

Can you take a screen grab and post it here?

Brendan

 

[ClubMan]

What Bank is it? If it is PTSB the mortgage statement is unintelligible.
If its BoI its straight forward.

Last time I looked at a BoI one it didn't make sense.
They way that they post interest charges every three months even though they are calculating interest daily and it is being paid monthly makes things difficult to follow.
It was also complicated by the fact that there was deferred interest which had its own account and I could not see if/when/where this was eventually capitalised.
As ever lenders seem to make things as difficult and impenetrable to punters as possible...

 

[WizardDr]

@ClubMan
Perhaps - but you can see your mortgage payments; interest and balance clearly.
By the way their APR assumes monthly debiting of interest so they charge less than APR.
But have a read of a PTSB statement for a master class in obtuseness.