Actual maths or taking the mick

polydactyl

I am changing main banks so rang AIB to move the mortgage DD from one bank to the other. In order to give me time to transfer the money I asked that the payment date move from the 2nd of the month to the 5th. They told me it would be an extra 5.60 a month for this one off 3 day delay???? So an extra 1500 approx over the Mortgage. On a tracker 1.1 over ECB and 370000 on Mortgage and 24 years.....is this actual maths or let’s get any penny we can any way we can by AIB??

Bubbaclaus

You're paying 3 days later so there is an extra 3 days of interest accruing on the entire outstanding principal per month every month for the rest of the mortgage

homer911

Sounds like they are moving every future DD, not just the one you have requested - You should clarify with them, or just let the DD be set up as you want. Banks will typically represent a DD on a mortgage a few days later when it fails the first time

893bet

Bubbaclaus wrote: »

You're paying 3 days later so there is an extra 3 days of interest accruing on the entire outstanding principal per month every month for the rest of the mortgage

No.

One month only will have an extra three days. There are be same number of days in the month still...

Bubbaclaus

893bet wrote: »

No.

One month only will have an extra three days. There are be same number of days in the month still...

From the OP i gathered the DD is being moved to the 5th permanently rather than for just 1 month?

Its not about how many days are in a month. There will be 3 extra days of interest accumulating on the principal per month for the next 24 years.

kaymin

Bubbaclaus wrote: »

From the OP i gathered the DD is being moved to the 5th permanently rather than for just 1 month?

Its not about how many days are in a month. There will be 3 extra days of interest accumulating on the principal per month for the next 24 years.

Assuming it's a permanent move, it's 3 extra days of interest on the current loan balance, once only (not per month).

Heres Johnny

His entire mortgage will be cleared 3 days later than expected, his last payment in 24 years time will be 3 days later.

Does this warrant a charge of 1500?

kaymin

Heres Johnny wrote: »

His entire mortgage will be cleared 3 days later than expected, his last payment in 24 years time will be 3 days later.

Does this warrant a charge of 1500?

Unlikely unless he has a humongous loan. 3 days interest on an outstanding loan balance of 300k @ 4% is only €98. There's the interest on interest effect but that would bring it up to no more than €200 over the loan term

Edit - compounding monthly brings the extra cost to €256 over the loan term in my example.

Edit #2 - and using the OP's figures the extra cost over the loan term is €44 but it's unlikely you would get the tracker rate for the extra term (3 days) you extend the loan out for.

M5

Moving the dd date back 3 days means that your mortgage is paid off 3 days later. That means that you are paying 3 days later every month and you pay interest by the day. Your original agreement was based on you paying on that day.

Maybe just keep it on the same day or go 3 days earlier?

vandriver

M5 wrote: »

Moving the dd date back 3 days means that your mortgage is paid off 3 days later. That means that you are paying 3 days later every month and you pay interest by the day. Your original agreement was based on you paying on that day.

Maybe just keep it on the same day or go 3 days earlier?

The second month is precisely one month later than the first month ie there is no '3 days later' apart from the first payment.

uck51js9zml2yt

OP I know it's a difficult concept, but have you asked the bank what the story is,?

My guess is that they would know the answer.!!

myshirt

How did you get a mortgage? I need to find that person and beat the absolute sh't out of them. You never should have been sold a mortgage if your knowledge is that appalling. These are professionals and it is unethical to be lending like that.

Heres Johnny

myshirt wrote: »

How did you get a mortgage? I need to find that person and beat the absolute sh't out of them. You never should have been sold a mortgage if your knowledge is that appalling. These are professionals and it is unethical to be lending like that.

Is that directed to the OP?
How about you contribute rather than ask why the OP isn't a mortgage expert just because they have one.
Should they be allowed own a car in your opinion?

Bubbaclaus

vandriver wrote: »

The second month is precisely one month later than the first month ie there is no '3 days later' apart from the first payment.

Every single payment is 3 days later. Compound interest is being calulated for an extra 3 days for every single month for the next 24 years.


Judging by some of the posts in this thread they should really teach this stuff better in school...

myshirt

Heres Johnny wrote: »

Is that directed to the OP?
How about you contribute rather than ask why the OP isn't a mortgage expert just because they have one.
Should they be allowed own a car in your opinion?

The answer has been given Johnny. No mortgage experts here. This is basic. Very basic. And extremely reckless to be lending to a person like that. I put it in the same category as a scenario where Provident would lend to a random homeless guy on the side of the street at 70% of an interest rate. It's completely unethical for people to behave like this and lend to people so, so bereft of basic knowledge. It's just not on in my view.

Abel Ruiz

kaymin wrote: »

Assuming it's a permanent move, it's 3 extra days of interest on the current loan balance, once only (not per month).

That makes sense to me.
The second month's payment is exactly 1 month after the first month's.

Bubbaclaus

Abel Ruiz wrote: »

That makes sense to me.
The second month's payment is exactly 1 month after the first month's.

Do i need to explain it again....

Every single payment is 3 days later for every month for the next 24 years. There is compound interest accumulating on the principial for an extra 3 days every month for the next 24 years.

The OP has moved back 24 years of payments, not 1 month.

This thread is pissing me off now.

Try_harder

Bubbaclaus wrote: »

Do i need to explain it again....

Every single payment is 3 days later for every month for the next 24 years. There is compound interest accumulating on the principial for an extra 3 days every month for the next 24 years.

The OP has moved back 24 years of payments, not 1 month.

This thread is pissing me off now.

imagine how the guy/gal in the bank feels!

Try_harder

Abel Ruiz wrote: »

That makes sense to me.
The second month's payment is exactly 1 month after the first month's.

the final payment date is now 3 days later- thats a lot of interest to accrue

Heres Johnny

myshirt wrote: »

Heres Johnny wrote: »

Is that directed to the OP?
How about you contribute rather than ask why the OP isn't a mortgage expert just because they have one.
Should they be allowed own a car in your opinion?

The answer has been given Johnny. No mortgage experts here. This is basic. Very basic. And extremely reckless to be lending to a person like that. I put it in the same category as a scenario where Provident would lend to a random homeless guy on the side of the street at 70% of an interest rate. It's completely unethical for people to behave like this and lend to people so, so bereft of basic knowledge. It's just not on in my view.

I changed my mortgage date twice due to changing jobs.
First I moved it from the 20th to the 10th and I didn't get a reduction in monthly payment.
Then I moved it from the 10th to the 29th and didn't get hit by a big monthly increase.
In neither case did my monthly payment change.
Mortgage will still be cleared in the same month 20 odd years from now if I just stick to the payment structure.
You've mentioned beating up the mortgage advisor, told the OP they shouldn't have a mortgage and compared them to a homeless person getting a high interest loan for asking a question and haven't contributed anything concrete since you are so sure.

Put it this way, is someone taking out a new mortgage offered different monthly payments based on the day of the month they want to pay it? If they were then every mortgage in the country would be paid on the 1st

Bubbaclaus

Heres Johnny wrote: »

Put it this way, is someone taking out a new mortgage offered different monthly payments based on the day of the month they want to pay it? If they were then every mortgage in the country would be paid on the 1st

This literally makes no sense unless you are making the outrageous claim that every single mortgage in the country starts off on the 1st of the month.

sydthebeat

Bubbaclaus wrote: »

Do i need to explain it again....

Every single payment is 3 days later for every month for the next 24 years. There is compound interest accumulating on the principial for an extra 3 days every month for the next 24 years.

The OP has moved back 24 years of payments, not 1 month.

This thread is pissing me off now.

The op has moved 24 years of payments by 3 days.

So it still should only be 3 days of interest.

Its not 3 days every month for 24 years.

Bubbaclaus

sydthebeat wrote: »

The op has moved 24 years of payments by 3 days.

So it still should only be 3 days of interest.

Its not 3 days every month for 24 years.

Oh ffs.

I give up. I'll let someone else get pissed off and try and explain how very basic loan interest works.

Heres Johnny

Bubbaclaus wrote: »

Heres Johnny wrote: »

Put it this way, is someone taking out a new mortgage offered different monthly payments based on the day of the month they want to pay it? If they were then every mortgage in the country would be paid on the 1st

This literally makes no sense unless you are making the outrageous claim that every single mortgage in the country starts off on the 1st of the month.

If I moved my payment from any other date in the month to the 1st (which I could do) would I be offered a reduction by the bank every month in line with the increase the OP has been charged?
The answer is certainly no.

Another question.

If the OP wanted to change his payment from the 2nd to let's say the 29th like I did, would he be charged an extra 45 or 50 euro a month making his mortgage 15, 000 derarer? The answer again is no.

That's the logic a few of you are following I've just expanded on how it's not how mortgages behave.

Heres Johnny

Bubbaclaus wrote: »

sydthebeat wrote: »

The op has moved 24 years of payments by 3 days.

So it still should only be 3 days of interest.

Its not 3 days every month for 24 years.

Oh ffs.

I give up. I'll let someone else get pissed off and try and explain how very basic loan interest works.

Thank you. Preferably someone else that actually knows.

micks

Heres Johnny wrote: »

I changed my mortgage date twice due to changing jobs.
First I moved it from the 20th to the 10th and I didn't get a reduction in monthly payment.
Then I moved it from the 10th to the 29th and didn't get hit by a big monthly increase.
In neither case did my monthly payment change.
Mortgage will still be cleared in the same month 20 odd years from now if I just stick to the payment structure.
You've mentioned beating up the mortgage advisor, told the OP they shouldn't have a mortgage and compared them to a homeless person getting a high interest loan for asking a question and haven't contributed anything concrete since you are so sure.

Put it this way, is someone taking out a new mortgage offered different monthly payments based on the day of the month they want to pay it? If they were then every mortgage in the country would be paid on the 1st

I've changed mortgage several times and been with 3 or 4 lending institutions at this stage
Same as you I've changed DD dates with no issues

My current mortgage DD is paid on the 7th of the month and I know for a fact that payment is not taken off my mortgage until the end of each month


If interest is charged Daily and my DD is the 4th of the month and wont be taken out till next tuesday will I be hit for the extra days interest? :eek:

micks

myshirt wrote: »

The answer has been given Johnny. No mortgage experts here. This is basic. Very basic. And extremely reckless to be lending to a person like that. I put it in the same category as a scenario where Provident would lend to a random homeless guy on the side of the street at 70% of an interest rate. It's completely unethical for people to behave like this and lend to people so, so bereft of basic knowledge. It's just not on in my view.

you should roll out the pay your mortgage weekly not monthly story to save vast amounts on interest

Heres Johnny

micks wrote: »

Heres Johnny wrote: »

I changed my mortgage date twice due to changing jobs.
First I moved it from the 20th to the 10th and I didn't get a reduction in monthly payment.
Then I moved it from the 10th to the 29th and didn't get hit by a big monthly increase.
In neither case did my monthly payment change.
Mortgage will still be cleared in the same month 20 odd years from now if I just stick to the payment structure.
You've mentioned beating up the mortgage advisor, told the OP they shouldn't have a mortgage and compared them to a homeless person getting a high interest loan for asking a question and haven't contributed anything concrete since you are so sure.

Put it this way, is someone taking out a new mortgage offered different monthly payments based on the day of the month they want to pay it? If they were then every mortgage in the country would be paid on the 1st

I've changed mortgage several times and been with 3 or 4 lending institutions at this stage
Same as you I've changed DD dates with no issues

My current mortgage DD is paid on the 7th of the month and I know for a fact that payment is not taken off my mortgage until the end of each month


If interest is charged Daily and my DD is the 4th of the month and wont be taken out till next tuesday will I be hit for the extra days interest? :eek:

You've hit the crux of the issue there micks. Mortgage interest is indeed compounded monthly in both our cases.
Frequency on compounding makes a difference.
It could be applied monthly, weekly, daily, every hour, every minute, every second or even continuously which is the mathematical concept denoted by the letter 'e'
To OP, my mortgage is AIB too and this didn't apply to me so don't take it from them and ask how frequently your interest is compounded.
Don't listen to the 2 posters that haven't a clue and have just resorted to insulting other posters.

893bet

Bubbaclaus wrote: »

Every single payment is 3 days later. Compound interest is being calulated for an extra 3 days for every single month for the next 24 years.


Judging by some of the posts in this thread they should really teach this stuff better in school...

I think it hilarious that by moving three days forward that every month now has 33 or 34 days.

We should use this concept to create more days in the month in general.

Judging by some of the posts I wonder if they ever went to school....

There is a single three days that is being compounded. Someone else has worked it out already at 100 quid or so or if you compound it at 250 or so. 1500 it is not.

Bubbaclaus

893bet wrote: »

I think it hilarious that by moving three days forward that every month now has 33 or 34 days.

We should use this concept to create more days in the month in general.

Judging by some of the posts I wonder if they ever went to school....

There is a single three days that is being compounded. Someone else has worked it out already at 100 quid or so or if you compound it at 250 or so. 1500 it is not.

I weep for the Irish educational system. Some logic you got there.

Collie D

Bubbaclaus wrote: »

I weep for the Irish educational system. Some logic you got there.

Right or wrong, I hope you're not working in said education system if you're so easily annoyed when you perceive others as being wrong or not getting something.

kaymin

Bubbaclaus wrote: »

I weep for the Irish educational system. Some logic you got there.

You're embarrassing yourself. It's one thing to be no good maths (everyone has their individual strengths), it's another being wrong and unable to admit it (or worse, see it!).

893bet

Bubbaclaus wrote: »

I weep for the Irish educational system. Some logic you got there.

I have far too many letters before my name and after my name so your tears are perhaps warranted. Letters are mine regardless of your sobbing into your maths book.


I also think it’s funny that you are so riled up. I am sitting on my couch, just finished last nights Chinese left over and I have contributed to your blood pressure. What a day to be alive.

StupidLikeAFox

Bubbaclaus wrote: »

I weep for the Irish educational system. Some logic you got there.

No need to be condescending. This is how I (and probably others) understand it, correct me if I am wrong:

Month 0 - July 10th: Drawdown
Month 1 - Aug 10th: Payment of 1 months interest (Jul 10th to Aug 10th)
Month 2 - Sep 10th: Payment of 1 month interest (Aug 10th to Sep 10th)
Month 3 - Oct 13th: Payment of 1 month + 3 days interest (Sep 10th to Oct 13th)
Month 4 - Nov 13th: Payment of 1 month interest (Oct 13th to November 13th)
etc..

So after the first month of the new payment date, we are back to paying 1 months interest.

If you are saying that every month should include the additional 3 days, then surely they are paying 34 days interest every month which can't be right?

893bet

StupidLikeAFox wrote: »

No need to be condescending. This is how I (and probably others) understand it, correct me if I am wrong:

Month 0 - July 10th: Drawdown
Month 1 - Aug 10th: Payment of 1 months interest (Jul 10th to Aug 10th)
Month 2 - Sep 10th: Payment of 1 month interest (Aug 10th to Sep 10th)
Month 3 - Oct 13th: Payment of 1 month + 3 days interest (Sep 10th to Oct 13th)
Month 4 - Nov 13th: Payment of 1 month interest (Oct 13th to November 13th)
etc..

So after the first month of the new payment date, we are back to paying 1 months interest.

If you are saying that every month should include the additional 3 days, then surely they are paying 34 days interest every month which can't be right?

Because it is pushed out 3 days there is a smidgen extra of interest on the capital there each month from that point on. Interest is paid on this smidgen every month there after. 1500 over the mortgage life time? Doubtful. That would mean if you took a two month mortgage break the additional owed would be an extra 60k ish?

AlexisM

Bubbaclaus wrote: »

I weep for the Irish educational system. Some logic you got there.

If you are a product of the Irish educational system then yes, perhaps you should weep.  
I put the numbers into Excel to calculate day by day interest accrual over 24 years.  Moving the payment date from the 2nd to the 5th (for every monthly payment) moves the monthly payment from 1461.38 per month to 1461.51 per month - 13 cents extra per month.  If the payment amount was unchanged, there would be about 43 left outstanding at the end of the 24th year - this has a present value of about 21.  It is a tiny tiny change in the context of a 370K mortgage.

It's as if the mortgage is paused for three days, accrues 3 days of interest - and then the 24 year mortgage starts with that little bit of interest (about €33) as an extra part of the capital.

Pop the numbers into Excel yourself and then maybe come back and clarify the issue for posterity

sydthebeat

Bubba was compounding the already compounded figures

Heres Johnny

Bubba isn't coming back

893bet

Bubbas maths are also demonstrated below in two recent posts

Bubbaclaus wrote: »

Saving 70% currently.

Bubbaclaus wrote: »

Nice idea, but unfortunately in my stupidity all the hard work i put in in my education and career up to this point has put me above the income threshold.

I'm one of those mugs that pays 35% of my income for a room in a house I'm never in because i spend over 50 hours a week working.

Saves 70% and spends 35% on rent and living on fresh air.

Fanny Wank

Heres Johnny wrote: »

Bubba isn't coming back

I don't blame him

Heres Johnny

893bet wrote: »

Bubbas maths are also demonstrated below in two recent posts

Bubbaclaus wrote: »

Saving 70% currently.

Bubbaclaus wrote: »

Nice idea, but unfortunately in my stupidity all the hard work i put in in my education and career up to this point has put me above the income threshold.

I'm one of those mugs that pays 35% of my income for a room in a house I'm never in because i spend over 50 hours a week working.

Saves 70% and spends 35% on rent and living on fresh air.

But he works 125% of a working week
Wonder where the other 20% of his 125% income goes?

Franz Von Peppercorn

I was trying to with out what the two arrogant posters meant. I mean they didn’t tell us.

I too thought it would be a once off payment.

I think that the banks are doing this. They are treating the payment as if it were late every month and calculating the fee at the end. So if the cost is not to be paid up front but at the end - every month the extra three days means that more interest has accrued and the payments being the same less capital is paid off. Every subsequent month the capital hasn’t been paid off as much as originally planned and therefore more interest accrues etc.

This is ludicrous though because they are asking for this compounded payment up front before it could have compounded.

The op could ask to over pay whatever is necessary on the 6th to get the capital to wherever it would have been on the 3rd.

Bubbaclaus

Heres Johnny wrote: »

Bubba isn't coming back

I explained why i was giving up. No point explaining how it works to people who are refusing to budge in their incorrect understandings.

Trying to score brownie points by claiming there's another reason i stopped trying/posting is a bit odd.

vandriver

Bubbaclaus wrote: »

I explained why i was giving up. No point explaining how it works to people who are refusing to budge in their incorrect understandings.

Trying to score brownie points by claiming there's another reason i stopped trying/posting is a bit odd.

Kettle pot black

polydactyl

Jazlyn Red Bather wrote: »

OP I know it's a difficult concept, but have you asked the bank what the story is,?

My guess is that they would know the answer.!!

Thanks for that answer I did multiple times and the person on the phone literally just said “ the amount to pay back will change” no help.

As explained above there is only 3 days extra interest as a one off as every other payment is exactly a month later. They are trying to screw me over or can’t do their own maths I reckon so will make sure I have the Mortgage amt available in the new acc for the first of the month some how.

StupidLikeAFox

Could you ask to move the payment for one month only, then revert to the third for each subsequent month?

Franz Von Peppercorn

Bubbaclaus wrote: »

I explained why i was giving up. No point explaining how it works to people who are refusing to budge in their incorrect understandings.

Trying to score brownie points by claiming there's another reason i stopped trying/posting is a bit odd.

Why didnt you try explain your reasoning before storming off.

lawred2

I've changed direct debit dates on the mortgage and was not hit with any adjustments.

On a fixed rate though if that makes any difference...

Fanny Wank

Franz Von Peppercorn wrote: »

Why didnt you try explain your reasoning before storming off.

He did. As did other people

They were ignored and told they were wrong

893bet

Could some one with a it of excel knowledge could do a spread sheet to calculate what the real cost should be?

kaymin

Fanny **** wrote: »

He did. As did other people

They were ignored and told they were wrong

If Buba was correct with his assertion that:
'there is an extra 3 days of interest accruing on the entire outstanding principal per month every month'

The cost would be alot more than the 1500 the bank quoted.

Using correct maths though it should actually cost only €45 assuming no penalty charges and they can retain the tracker rate for the 3 day loan extension