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interest charged on money not received

  • 30-07-2010 12:19am
    #1
    maude6868
    Registered Users, Registered Users 2 Posts: 245 ✭✭


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Comments

  • #2
    phormium
    Registered Users, Registered Users 2 Posts: 3,395 ✭✭✭phormium


    It is unusual for interest to be charged on anything other than the outstanding balance of an account other than in cases when the interest is added up front which is not the case with a mortgage.

    Having 2 accounts is not that unusual, maybe original one was fixed rate and you couldnt increase it, it is a common misconception that consolidating 2 loans together makes them cheaper, this is not necessarily the case. 2 loans on same rate and same term simply combined will result in a repayment amount of exactly the same as old loan repayments added together. What makes it cheaper, in theory, is if you are extending the term or getting a cheaper interest rate. So if one loan was for 20 yrs and the other for 10 adding them together over 20 does make the repayment cheaper in the short term as you have just extended the 10 yr one to 20 yrs but long term you pay more interest.

    Has the bank confirmed to you that they have been charging interest on the undrawn down funds?


  • #3
    Kalimah
    Registered Users, Registered Users 2 Posts: 1,323 ✭✭✭Kalimah


    I'd agree with phormium that interest is only charged on the outstanding balance of the account and as phormium said the interest on a mortgage account account is not front loaded at the start of it. Who told you that you were paying interest on the 160k?
    I'd agree too about combining the two loans. If they are both for the same term and interest rates then there would be no saving in combining them unless you're going to exten the term.


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