Mortgage Repayment Amount

Chesty08

Can someone help me out here..

if I was to take a mortgage for €251,000, 35 year term and the interest rate was 2.65% , what would I be paying back & what would the total amount be?

I have final figures from the bank but I think they are well off. Just want clarity on this please before going back

pjmn

€916.83 per month

€385,067 in total (assuming the rate doesn't change for the entire period)

Smee_Again

Figures from the bank probably include the follow on rate which will be higher than the fixed.

sentient_6

I got 917.62 a month.
Total 381855.35.

What do you think the figures should be OP?

Chesty08

pjmn wrote: »

€916.83 per month

€385,067 in total (assuming the rate doesn't change for the entire period)

Thank you. This is what I have worked out.

My final mortgage offer shows

Month instalment as above
Number of repayments 420

But the the total amount repayable as €445k. Is there something am missing?? They have my number of months & monthly instalment amount as above and if I pay all that it comes to your number.

Why would my total amount repayable be €445k

Is it an error?

pjmn

sentient_6 wrote: »

I got 917.62 a month.
Total 362,958.60.

What do you think the figures should be OP?

If you multiply €917.62 by 420 (months) you'd get €385,400?

Chesty08

sentient_6 wrote: »

I got 917.62 a month.
Total 362,958.60.

What do you think the figures should be OP?

917.62 per month
385,400.16 total

My total is showing as 445,000 though?

pjmn

Chesty08 wrote: »

Thank you. This is what I have worked out.

My final mortgage offer shows

Month instalment as above
Number of repayments 420

But the the total amount repayable as €445k. Is there something am missing?? They have my number of months & monthly instalment amount as above and if I pay all that it comes to your number.

Why would my total amount repayable be €445k

Is it an error?

See other posters post above the bank may be making an assumption about future interest rate movement and have that built in to their figures - it should be explained on their letter...

sentient_6

pjmn wrote: »

If you multiply €917.62 by 420 (months) you'd get €385,400?

Sorry i had a 100 overpayment in the calculator i didn't notice first go.

Smee_Again

Chesty08 wrote: »

Thank you. This is what I have worked out.

My final mortgage offer shows

Month instalment as above
Number of repayments 420

But the the total amount repayable as €445k. Is there something am missing?? They have my number of months & monthly instalment amount as above and if I pay all that it comes to your number.

Why would my total amount repayable be €445k

Is it an error?

Is the 2.65% a fixed rate? The loan pack will include a follow on or variable rate after the fixed period, so you need to do 2 calculations.

1 for the fixed period and a second for the remaining capital at the follow on rate.

Then add those together for the total amount repayable.

pjmn

Looks like they may be quoting you the total amount if rates went up by 1%

Chesty08

pjmn wrote: »

Looks like they may be quoting you the total amount if rates went up by 1%

Yes it could be.

What am I liable to pay? Say in 3 years I wanted to switch provider or go back to a fixed rate... do I pay the total amount repayable they’ve quoted or is it recalculated based on what’s left of the loan amount due

Smee_Again

Chesty08 wrote: »

Yes it could be.

What am I liable to pay? Say in 3 years I wanted to switch provider or go back to a fixed rate... do I pay the total amount repayable they’ve quoted or is it recalculated based on what’s left of the loan amount due

Interest is only paid on the outstanding capital, so when you move mortgage or change rate/term the total interest paid is lower.

If you move before the fixed period end you may have to pay a breakage fee but there’s no fee outside of a fixed rate period.

Chesty08

Smee_Again wrote: »

Interest is only paid on the outstanding capital, so when you move mortgage or change rate/term the total interest paid is lower.

If you move before the fixed period end you may have to pay a breakage fee but there’s no fee outside of a fixed rate period.

Sorry for being stupid... is the outstanding capital is the balance of my €251,000 less monthly payments after 3 years (I know it’s not 917.62 x36 as some of the 917.62 is interest payments).

So for talk sake it will be 230k?

Or is the outstanding capital from the 445k I see now on the total amount repayable (I.e the figure quoted with the future rate added) ?

Smee_Again

Chesty08 wrote: »

Sorry for being stupid... is the outstanding capital is the balance of my €251,000 less monthly payments after 3 years (I know it’s not 917.62 x36 as some of the 917.62 is interest payments).

So for talk sake it will be 230k?

Or is the outstanding capital from the 445k I see now on the total amount repayable (I.e the figure quoted with the future rate added) ?

The €251K less the capital payments over the 3 years.

The €445K is notional, it’s illustrative of what you’d repay of you do absolutely nothing but make your monthly payments for the 35 year term.

Even then it’s extremely unlikely the variable rate used in the calculation will stay the same over the period.

Basically forget about the big number and focus on getting the best rate for the next few years that suits you, and then remortgage.

For me I bought a new build with H2B so I knew I wouldn’t be moving in the first five years (at least) so I fixed for that time. I liked knowing that my payments wouldn’t change. The follow on rate i tool is higher than another bank offered but I’ll fix or switch so it’s irrelevant.

pjmn

Forget the €445k - that's the total amount you would have to pay if the interest rate was 3.65% and you kept the mortgage for 35 years.

E.g you borrow €251k today and you win the lotto in a month - let's even assume you haven't made a payment yet - you'll owe the bank the €251k and one months interest and that's it (the only complicating factor in this example would be if you had opted for a fixed rate - then there may be a penalty to pay)...

Chesty08

Smee_Again wrote: »

The €251K less the capital payments over the 3 years.

The €445K is notional, it’s illustrative of what you’d repay of you do absolutely nothing but make your monthly payments for the 35 year term.

Even then it’s extremely unlikely the variable rate used in the calculation will stay the same over the period.

Basically forget about the big number and focus on getting the best rate for the next few years that suits you, and then remortgage.

For me I bought a new build with H2B so I knew I wouldn’t be moving in the first five years (at least) so I fixed for that time. I liked knowing that my payments wouldn’t change. The follow on rate i tool is higher than another bank offered but I’ll fix or switch so it’s irrelevant.

I think I understand now.

This is a 3 year fixed term. My plan after this is either go back to fixed or switch provider at a better rate.

Thank you for your advise!!

Smee_Again

Chesty08 wrote: »

I think I understand now.

This is a 3 year fixed term. My plan after this is either go back to fixed or switch provider at a better rate.

Thank you for your advise!!

Have a look at some mortgage amortisation calculators, plug in the figures and you can see how a mortgage is structured and what impact switching, fixing and over paying can have.