Mortgage repayments

Hennybug

OK this is probably an incredibly stupid question but hopefully someone can clarify I noticed as well as my monthly repayments the Bank take interest payments also which are added onto the overall loan. I thought that my repayments took into account capital and interest so why the additional interest payments?

tHE vAGGABOND

So do you have 1 or 2 repayments?

As far as I know, for every mortgage I have ever heard of, you should have one repayment, which includes repaying the principal + interest? [Out of random interest, the mortgage is front loaded with interest, so at the start you are paying back next to northing off the actual loan, just the interest].

Hennybug

tHE vAGGABOND wrote: »

So do you have 1 or 2 repayments?

As far as I know, for every mortgage I have ever heard of, you should have one repayment, which includes repaying the principal + interest? [Out of random interest, the mortgage is front loaded with interest, so at the start you are paying back next to northing off the actual loan, just the interest].

I have one repayment a month but then every 3 months an interest payment is taken - this is what's confusing me. I didn't want to approach the Bank if it was a normal process

homer911

Is your mortgage partially fixed/partially variable?

If in two parts, one could have a quarterly cap date and explain the extra transaction

Hennybug

homer911 wrote: »

Is your mortgage partially fixed/partially variable?

If in two parts, one could have a quarterly cap date and explain the extra transaction

No, it's a standard mortgage

Toots

Are you looking at your current account statement or your mortgage statement?

Hennybug

Toots* wrote: »

Are you looking at your current account statement or your mortgage statement?

My Mortgage statement

lucky-colm

Hennybug wrote: »

I have one repayment a month but then every 3 months an interest payment is taken - this is what's confusing me. I didn't want to approach the Bank if it was a normal process

don't ever feel as do you are "annoying" the bank or any other financial institution for that matter by asking them why they are taking your hard earned money.
you have every right to go to the bank and ask why this money is being removed from your account every 3 months. if its the banks mistake "rear up":mad: and ask that all monies be reinstated back into your account with interest. if it is part of your mortgage again "rear up":mad: but not as severly as you would have done in the above instance:) and ask why is it being taken and why were you not informed of this unusual repayment when you were being sold the mortgage in the first place or notified by post if it only began recently. banks make mistakes and just take your money from time to time and then stand up and say its a mistake:mad: but if the shoe were on the other foot:mad:

op it sounds to me from your above statement as if you feel you may make an ejit of yourself if you ask the bank an obvious question or that they may make you feel stupid because you feel that they are somewhat above you.
its your money you can ask as many stupid questions as you want about it they didn't mind you asking stupid questions when they were selling you their product never be afraid to ask where your money is going even if you did sanction it and forgot:o

Hennybug

I had another look at my loan offer today and it definitely isn't built into it. It's a normal letter of offer with the fixed repayment and the information on the change in monthly payments if the interest rate goes up by 1% - standard fare. I deal with the same bank for the business and they're doing this on both my house mortgage and office loan. I'm currently trying to get an extension to my O/D sanctioned, hence the reason i don't want to do anything till i know what i'm talking about

chris85

If you are looking at your mortgage statment it may be TRS (tax relief at source) being applied. This is money recieved from revenue put against your payments. its applied directly to the mortgage account.

But to be honest this is generally done each month

Hennybug

No it's not a credit to the account it's a deduction - the repayments are going in then the loan amount goes back up again when the interest is deducted

Toots

It's the interest. Interest is applied every quarter, so a normal mortgage statement should show 3 repayments in and one interest deduction out. It's perfectly normal and is standard for a capital and interest mortgage. My own mortgage is the same.

chris85

Hennybug wrote: »

No it's not a credit to the account it's a deduction - the repayments are going in then the loan amount goes back up again when the interest is deducted

Ah ok that just the portion of your reapyment that is interest. Basically goes like below for instance



Balance €200000 (or whatever)

Payment - €1000

Interest +€800

Balance €199800


If you are in your first year or two of your mortgage which i sense you may be (sorry if this is wrong, basing it on fact this may be the first mortgage statement you have had) then the interest amount will be about 95% of your repayment amount

Hennybug

That's exactly how it is Chris.

Thanks everyone - glad i didn't go complaining to the Bank before posting here

chris85

Hennybug wrote: »

That's exactly how it is Chris.

Thanks everyone - glad i didn't go complaining to the Bank before posting here

Never any harm in enquiring with bank on any problem.