Think my Bank is Undercharging me on Mortgage

E

eagless

Guest
I have a Mortgage for the last 3 years and am going about buying another house so I was looking through old records to see what my mortgage payments were etc. Anyway, I think the Bank have been undercharging me for the past 3 years. I have a 20 year mortgage and am paying off the amount as stated on the bank letter offering the mortgage however, by my own calculations I think they are undercharging me. Should I let them know about this or should i just leave it go and argue the toss with them if they pick up on the mistake at some stage. What rights would i have if i adopted a wait and see approach? grateful for any advice.
 
eagless said:
I have a Mortgage for the last 3 years and am going about buying another house so I was looking through old records to see what my mortgage payments were etc. Anyway, I think the Bank have been undercharging me for the past 3 years. I have a 20 year mortgage and am paying off the amount as stated on the bank letter offering the mortgage however, by my own calculations I think they are undercharging me.
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Are you allowing for mortgage interest relief at source?
Should I let them know about this or should i just leave it go and argue the toss with them if they pick up on the mistake at some stage. What rights would i have if i adopted a wait and see approach? grateful for any advice.
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If you think that they are mistaken then you should tell them ASAP.
 
Or post details of your mortgage (e.g. amount, repayments, rate etc.) and/or statements here if you like.
 
No I'm not on an Interest Only Mortgage and I have allowed for the Mortgage Interest Relief. My Mortgage is for 200,000 and is for 20 years. My rate is fixed for the first 5 years at 4.4%. I have a letter from the bank saying those details and saying payment is €1,125 per month. I then get M.I.R. which reduces my payments to approx €987 per month. However, I have calculated myself that I should be paying €1,254 per month and not the €1,125 per month. Have I just mis-calculated or are the bank the ones who miscalculated??
 
I'm getting the same figure as you €1254.93 to be precise. double check with the bank.
 
It does sound like you're paying too little.

Since you're 3 years in at a fixed rate of 4.4% the interest component of your repayment is about €670 euros. Interest TRS is 20% of this €134. €1254 - €134 = €1120

Look at the "Monthly Table" section of KJ's mortgage calculator to see the repayments broken into Interest and Principal components.
 
I was just on another site and found a nifty mortgage calculator specific to Irish mortgages. [broken link removed]
 
Anyone found any other good mortgage calculators?
 
You don't benefit from any underpayment, as the bank will almost certainly be charging interest based on your actual repayments, so they don't lose out in the long run.
 
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