Extended Mortgage term and Buildings Insurance Premiums.

Just realised something else too. Although they said from the outset they would debit an Insurance payment, thats fair enough. I suspect they've done that in later years too where it is unclear, but i'll confirm that later. In anycase, the furthering of providing this "credit" or lets call it a "sundry balance" for the Insurance is covered by the consumer credit act 1974. Not one iota of this have they complied with.

If you're not happy with that, put their figures into this calculator, which gives a repayment of £83. So you're saying that the society and two separate online calculators are wrong, and you are right.

I'll tell you what i have got riding on the fact i am right.............. I reckon about £18k with compensation and my mortgage finished. And BTW thats not money for nothing, its what i have over paid with interest and compensation. You personally have helped me understand a lot of it that i would not of understood without your help. Take a time out to reflect, have a look and re think. There is nothing like a financial interest to make you learn quick, and boy have i learned quick. Late in the day, but still i got there. As ever i'll keep the thread updated. I'll see if i can manage a nights sleep tonight.......................

"I" didn't arrive at anything. I plugged their figures into that online calculator and it produced the monthly repayment as shown in your screen grab.

If you're not happy with that, put their figures into this calculator, which gives a repayment of £83. So you're saying that the society and two separate online calculators are wrong, and you are right.

https://www.moneysavingexpert.com/mo...te-calculator/

Ok mate, i'll do that right now. What start balance did you put in and what term ? Then i'll enter it and see that you are correct .

[Still Waving]

No, you can see in the screen grab. The screen grab, shows that is an incorrect calculation so i'm not sure how you arrived at that figure. So here is what you can do (that sounds impolite, i don't mean it that way at all. ):

"I" didn't arrive at anything. I plugged their figures into that online calculator and it produced the monthly repayment as shown in your screen grab.

If you're not happy with that, put their figures into this calculator, which gives a repayment of £83. So you're saying that the society and two separate online calculators are wrong, and you are right.

https://www.moneysavingexpert.com/mo...te-calculator/

my rate now is 4.99% which is higher that 4.24% and my current payment of £71 is less than that £82 !!!

As I said in post #158 putting their figures from the 2010 statement into the online mortgage calculator.

You're not still deducting MIRAS are you?

No, you can see in the screen grab. The screen grab, shows that is an incorrect calculation so i'm not sure how you arrived at that figure. So here is what you can do (that sounds impolite, i don't mean it that way at all. ):

The 2010 statement shows account first movement 1/1/1993. And it shows a a term of 370 months. Now there is confusion around the actual start or restart and the term. As a point of fact the term is 418 months from Jan 1989 with a balance of £13,375.69 or 1st Jan 1993 with a balance of £13,301.72. Choose either to have a look at, but one of them, despite all the paperwork i have and the phone calls its not clear which one they are using.

Now the 2010 statement shows an interest rate of 4.24% . Work it anyway using either start date or balance or even mix them up its not even close to £82.35.

[Still Waving]

As I said in post #158 putting their figures from the 2010 statement into the online mortgage calculator.

You're not still deducting MIRAS are you?

Of course not! The proportions of principal and interest change with the reductions in the balance of loan. The amount of principal repaid increases each year.

Assume a rate fixed for the entire period of the loan. If they reduced the repayment every year just because the balance had reduced, you would pay off less principal than you otherwise would have, and the term would just go on and on.

This is incorrect:

Of course not! The proportions of principal and interest change with the reductions in the balance of loan. The amount of principal repaid increases each year.

Assume a rate fixed for the entire period of the loan. If they reduced the repayment every year just because the balance had reduced, you would pay off less principal than you otherwise would have, and the term would just go on and on.

How do you arrive at £83.25 ?

[Still Waving]

. What will not happen is that the capital balance lowering reduces the payment. It will reduce the interest portion but not the actual payment.

Of course not! The proportions of principal and interest change with the reductions in the balance of loan. The amount of principal repaid increases each year.

Assume a rate fixed for the entire period of the loan. If they reduced the repayment every year just because the balance had reduced, you would pay off less principal than you otherwise would have, and the term would just go on and on.

This is not even a thread anymore, its a forensic financial investigation !!

Weird:

This is why i'm using £13,301.72. The correct repayment should be £68.46 . Again its £20 (roughly adrift). There is two possible explanations for this.
[1] Its an incorrect calculation.
[2] Its a Insurance payment top up that has not been disclosed.

As a matter of fact there is not one single insurance related document in my bundle. And for an extra laugh, when i ran this morning to get my info, the guy said "we may be able to switch you to a better rate" . I said no thanks.

I haven't been looking at these later years, but I've just run those 2010 figures (£9971 - 4.24% - 13 yrs - closest I can get to 12y 11m) and it comes out at £83.25, which is not far off their £83.62.

Your calculation is incorrect. You can pick any capital amount, and term you like and pick an interest rate you like. The payment will remain the same until the term is finished. If the rate changes then the payment will change up or down. What will not happen is that the capital balance lowering reduces the payment. It will reduce the interest portion but not the actual payment.

For example, my current mortgage balance is approx £1400. it finishes in November 2023. I know the interest rate is 4.99%. And i know my payment is £71.74.

[Still Waving]

If i run £13,301.72 at 370 months @ 4.24% i get £64.49 ?
The next year, 2010 they get a different rate again @4.24%

I haven't been looking at these later years, but I've just run those 2010 figures (£9971 - 4.24% - 13 yrs - closest I can get to 12y 11m) and it comes out at £83.25, which is not far off their £83.62.

I'm not clear why you are using £13301 ?

Incidentally, it's odd that they say on the 2010 statement that interest charged from 1/8/09 to 31/12/10 was 4.24%, when in the 2009 one they interest charged from 31/3/09 to 31/7/09 was 4.24%.

You might find these links interesting

https://www.yopa.co.uk/homeowners-hu...gage-interest/

(Scroll down to Different Interest Calculation Methods)


https://www.coventrybuildingsociety....alculated.html

In the early years (at least) AN calculated the interest on 31/12 and added it, so it was already included in the Brought Forward on 1/1.

Let me explain why i think its very important. Their initial calc:
£13,375.69, @ 25 years @12.75% they get to £118.69 , i get the calc to £112.81 so if i'm correct they are overcharging by £5.88. Some £70 over the year. If they had to refund that over the course of the years 1989 to 1992 it would get very complicated for them, hence the transfer to a new system and extend everyones mortgage and not tell them. No one would know.

Here is an initial offer from 1988, it never completed at the time. But you can use their figures again and see the same mistake:

And if i run that calc through at a 20 year term its bang on.