Selling house, paying bank back v's online figure

One_Of_Shanks

Hi,

We're putting our house on the market. (only mortgage I've ever had, i.e I was a first time buyer) and a thought just crossed my mind about paying back the money to the bank, any input would be great.

We have 200k outstanding on the mortgage according to online banking 365 thingy.
We're on variable rate now, and are 3 and a half years into repayments.
Initial mortgage was for 215k

This might sound like a bizarre question, but will the amount we have to pay the bank be the exact amount outstanding on the mortgage at the point of sale, or will there be any hidden costs/charges that could arise?

The reason I ask is because every quarter the amount outstanding actually rises due to interest being added.
So.... When we go to sell, can they ask for additional interest fees OR do we just pay them the amount stated as owed on our online banking figure?

I would ring and ask, only obviously its a Friday evening and the horrible thought just occurred to me that we might owe more than I expected?

NinjaTruncs

Interest owed will be applied so expect to pay a little more than what is shown online.

One_Of_Shanks

NinjaTruncs wrote: »

Interest owed will be applied so expect to pay a little more than what is shown online.

OK, thanks for the reply.

Would you or anyone have any idea roughly how much?

I mean would we be talking a few hundred or thousands? Or tens of thousands?

I estimate we've paid roughly 42 payments of 1,031 euro per month, and the amount stated has only shrunk from 215k to 200k.

So when I sell the property, how much above the remaining 200k could I be looking at?

Marcusm

One_Of_Shanks wrote: »

OK, thanks for the reply.

Would you or anyone have any idea roughly how much?

I mean would we be talking a few hundred or thousands? Or tens of thousands?

I estimate we've paid roughly 42 payments of 1,031 euro per month, and the amount stated has only shrunk from 215k to 200k.

So when I sell the property, how much above the remaining 200k could I be looking at?

Do you still have a copy of the terms and conditions of the mortgage; this would advise you of any termination costs - e.g. rebate of reduced introductory rate or fees. Otherwise, your solicitor would request a settlement amount for the proposed completion date and this would prompt the bank to give you a formal number. You could always request this from them at this stage - suggest you are looking to pay it off and ask for a settlement amount for (say) 2 months hence.

NIMAN

One_Of_Shanks wrote: »

OK, thanks for the reply.

Would you or anyone have any idea roughly how much?

I mean would we be talking a few hundred or thousands? Or tens of thousands?

I estimate we've paid roughly 42 payments of 1,031 euro per month, and the amount stated has only shrunk from 215k to 200k.

So when I sell the property, how much above the remaining 200k could I be looking at?

The reason for this is the fact that you have been paying down interest from the start.

You can ask then for a settlement figure anytime, they got back to me in about 24hrs when I asked a few times in the past.

One_Of_Shanks

Thank you Niman and Marcusm.

I think I have a copy of the original terms somewhere in work. But cant get near them til Tuesday.

I'm just panicking a bit now and wondering roughly how bad this could be? Would you have any rough idea what sort of way they calculate these things?

I mean if its a couple of grand then I'll sleep easy but if its something huge then I'd prefer to know asap

Arbiter of Good Taste

You're paying interest quarterly, so worst case scenario, depending on when you've last paid interest compared to date of sale, it should only be (max) three months worth of interest. On the basis of a €215k mortgage, probably a few thousand plus any breakage costs (if applicable)

dubrov

It depends on the date you pay the bank back. Interest accrues daily but is only charged to the account at pre-defined intervals.

If you are charged interest quarterly, you can make your own estimate by taking the latest balance and adding on your own estimate of interest. E.g. If you are charged €600 of interest each 3 months and it has been one month since interest has been last applied then you would owe a further €200 (€600/3).

The following would give you a decent estimate:

Balance * [1 + (Number of days since last interest charge)/365*Interest Rate]

E.g. 200000 * (1+ (30/365*4%)= 200,657

If you closed on the day interest is applied, the balance is what you would pay

One_Of_Shanks

Fantastic. Really appreciate that Dubrov, thanks a million!

One_Of_Shanks

Thanks everyone for replies.

So just to clarify, if theres 200k outstanding, and my quarterly interest is lets say 1,500 then the amount I have to pay the bank upon selling cannot exceed 200k + 1,500 ?

Have I read that right?

Thanks in advance and yes I'll be clarifying with the bank next Tuesday, just trying to avoid a few sleepless nights in between

dubrov

Yes, you are correct.

You will need to continue to pay your mortgage until closing but your balance will also reduce during this time.

Marcusm

One_Of_Shanks wrote: »

Thanks everyone for replies.

So just to clarify, if theres 200k outstanding, and my quarterly interest is lets say 1,500 then the amount I have to pay the bank upon selling cannot exceed 200k + 1,500 ?

Have I read that right?

Thanks in advance and yes I'll be clarifying with the bank next Tuesday, just trying to avoid a few sleepless nights in between

dubrov wrote: »

Yes, you are correct.

You will need to continue to pay your mortgage until closing but your balance will also reduce during this time.

That will be the case PROVIDED there are no fees, penalties or breakage costs. These could apply if, for example, you had an initial discounted rate which has now reverted to SVR. There can be a period in which you are required to pay back the discount. If it's always been an SVR mortgage then I think the financial policy perspective (CBoI etc) is that there should not be any breakage costs (except admin fees if relevant).

One_Of_Shanks

Thanks very much guys. No, no we hasn't any discount rate, we had fixed rate which switched back to variable last month.

Cheers for the help