aibredress
Registered User
- Messages
- 58
You can disagree all you want. The maths is simple.@RedOnion I disagree
3% | capital | ||
10000 | 300 | 0 | 10300 |
10300 | 309 | 0 | 10609 |
10609 | 318.27 | 0 | 10927.27 |
10927.27 | 327.8181 | 0 | 11255.09 |
11255.09 | 337.6526 | 0 | 11592.74 |
11592.74 | 347.7822 | 0 | 11940.52 |
11940.52 | 358.2157 | 0 | 12298.74 |
12298.74 | 368.9622 | 0 | 12667.7 |
12667.7 | 380.031 | 0 | 13047.73 |
13047.73 | 391.432 | 0 | 13439.16 |
13439.16 | 403.1749 | 0 | 13842.34 |
13842.34 | 415.2702 | 0 | 14257.61 |
14257.61 | 427.7283 | 0 | 14685.34 |
14685.34 | 440.5601 | 0 | 15125.9 |
15125.9 | 453.7769 | 0 | 15579.67 |
15579.67 | 467.3902 | 0 | 16047.06 |
6047.064 |
3% | capital payment | ||
10000 | 300 | -50 | 10250 |
10250 | 307.5 | -50 | 10507.5 |
10507.5 | 315.225 | -50 | 10772.73 |
10772.73 | 323.1818 | -50 | 11045.91 |
11045.91 | 331.3772 | -50 | 11327.28 |
11327.28 | 339.8185 | -50 | 11617.1 |
11617.1 | 348.5131 | -50 | 11915.62 |
11915.62 | 357.4685 | -50 | 12223.08 |
12223.08 | 366.6925 | -50 | 12539.78 |
12539.78 | 376.1933 | -50 | 12865.97 |
12865.97 | 385.9791 | -50 | 13201.95 |
13201.95 | 396.0585 | -50 | 13548.01 |
13548.01 | 406.4402 | -50 | 13904.45 |
13904.45 | 417.1334 | -50 | 14271.58 |
14271.58 | 428.1474 | -50 | 14649.73 |
14649.73 | 439.4919 | -50 | 15039.22 |
5839.22 |
No, that doesn't prove it. Or more, it proves something else.point proved?
No, that doesn't prove it. Or more, it proves something else.
But you might have a point overall that you didn't realise (or it's different to what you explained).
The 12% refund isn't reducing. But the interest is compounded. So you are 'earning' 3% on the compounded 12%, rather than just the 12%.
Take 100k loan, at 3%, with 20 years remaining 10 years ago. The balance reduction on that is 12k. But the interest compounded on that 12k is a little over 4k. The interest charged in the 12k is less than the refund on the 16k (12k plus the 4k accrual/refund). It's 8 or 9 euro per month on that amount. So there is a benefit, but it's only on the interest amount, not the total amount. Talking about reducing capital & interest confuses the whole thing, and has already been discussed in another thread.
If you want the same effect after the refund, then just pay the interest refund against the mortgage balance.
Thanks Brendan, I did something similar myself to see if it held true.I put a refund of €10,000 into October's calculator
I put in an interest rate of 3% constant for the whole period.
October 2008 - July 2020 would be 12 years @3% simple interest would be €3,600
It is €4,243 according to the calculator.
So that is an extra €600 in interest over 12 years.
It's not that surprising as the interest rate is so low.
Most people will be less than 12 years.
Brendan
it just seems to be a bit of a fudge to my uneducated eyes anyway,
This was a completely separate issue, and has no bearing on this. By not including interest accrued at the point in time in the 'topped up' loan balance documents, AIB were actually lending more than they said they were. It's a completely separate issue.Just referring to another issue last year or the year before, AIB as I understand it, had to refund compound interest to personal loan customers who topped up loans online.
This was a completely separate issue, and has no bearing on this. By not including interest accrued at the point in time in the 'topped up' loan balance documents, AIB were actually lending more than they said they were. It's a completely separate issue.
No, I'm definitely not saying that.are you saying the compound interest will go nowhere and is purely a function of calculating the interest refund?
No, I'm definitely not saying that.
You brought in a completely separate issue, which has nothing to do with this. They didn't refund compound interest - they refunded the interest charged on an amount that they didn't explain to the customer that they were borrowing (which was the interest outstanding, but not capitalised, at the date of the top-up).
Discussing it clouds the topic here.
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