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Missed Mortgage payments Old Fixed rate or new tracker rate

  • 09-05-2013 7:50am
    #1
    ronan45
    Registered Users, Registered Users 2 Posts: 1,584 ✭✭✭


    I recently got my tracker mortgage back after a fixed period. But during the Fixed period i missed 8 payments spread over 3 years. I want to pay the bank back these missed payments but wondering. Do i need to pay them these 8 months back at the Old 4.8% Fixed rate amount or the my new tracker rate 0.5 Ecb Rate that im on now.
    Obviously i would prefer the new rate as it would be about 3000 euro cheaper to pay the arrears, but im assuming life is not that easy lol :cool:
    I am assuming I need to pay these 8 old months at the old fixed rate and not at my current rate?


Comments

  • #2
    dobsdave
    Closed Accounts Posts: 1,814 ✭✭✭dobsdave


    ronan45 wrote: »
    I recently got my tracker mortgage back after a fixed period. But during the Fixed period i missed 8 payments spread over 3 years. I want to pay the bank back these missed payments but wondering. Do i need to pay them these 8 months back at the Old 4.8% Fixed rate amount or the my new tracker rate 0.5 Ecb Rate that im on now.
    Obviously i would prefer the new rate as it would be about 3000 euro cheaper to pay the arrears, but im assuming life is not that easy lol :cool:
    I am assuming I need to pay these 8 old months at the old fixed rate and not at my current rate?

    Have you contacted your bank?


  • #3
    ronan45
    Registered Users, Registered Users 2 Posts: 1,584 ✭✭✭ronan45


    dobsdave wrote: »
    Have you contacted your bank?

    Yes one guy at my branch said the new rate as they are missed payments and that Interest rate doesnt apply anymore, but then the central office told me i had to pay the full arrears and the old interest rate still stood as that was the interest at the time of the missed payment. :confused: IM happy to pay either but just want to make sure im paying the correct amount. I am a tad suspicious of the banks thou :o
    But im more happy to pay the tracker rate arrears :pac:


  • #4
    roro2
    Registered Users, Registered Users 2 Posts: 412 ✭✭roro2


    It's not really a case of making the repayments at any specific rate. There are arrears of 8 payments of x amount - these arrears will not be reduced because the interest rate subsequently changed. Interest accrues on a daily basis at the rate applying at the time, regardless of whether you make your repayments. You will actually have to make slightly higher repayments to take account of the fact that the mortgage balance has not reduced in line with the missed payments – but I’m not sure how the bank will adjust for this. Just be thankful that surcharge interest doesn’t apply anymore – that would have been a hefty bill!


  • #5
    murphaph
    Registered Users, Registered Users 2 Posts: 19,049 ✭✭✭✭murphaph


    roro2 wrote: »
    It's not really a case of making the repayments at any specific rate. There are arrears of 8 payments of x amount - these arrears will not be reduced because the interest rate subsequently changed. Interest accrues on a daily basis at the rate applying at the time, regardless of whether you make your repayments. You will actually have to make slightly higher repayments to take account of the fact that the mortgage balance has not reduced in line with the missed payments – but I’m not sure how the bank will adjust for this. Just be thankful that surcharge interest doesn’t apply anymore – that would have been a hefty bill!
    Indeed. You missed some payments so your mortgage has not reduced as it was planned to so your are paying more each month than you would have been had you made all your payments.

    Now you're off the fixed rate you can pay as much off the loan as you like (assuming the bank doesn't have some minimum amount for lump sum payments).


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