Hi,
I have a repayment mortgage which was originally £730 per month for which I have made over payments in the past. I rang my lender 18 months ago to stop the overpayments and have my direct debit put back to the original amount. I've just realised that they in fact reduced my direct debit to £700. It seems that they recalculated the mortgage payment amount without telling me, in this way the loan would continue to be spread over the original 25 years rather than reaping the benefits of my overpayments. If I do nothing then I will end up paying about £4000 pounds more in interest than if my payment had been left at £730.
Are they allowed to do this? I know for sure that if I'd asked to reduce my payment below the original £730 they would say no, so it seems unfair they can do it on the sly,
If I complain, could they just agree my payments are wrong, and since underpayments are not allowed on my mortgage I owe them 18 x £30=£540 ? I don't have the money so maybe I should just keep quiet?
If I make a one off payment to catch up, and get my direct debit corrected would that resolve it? It still seems that I would be behind where I should be due to the cumulative effects of interest over that 18 month period, although maybe that's an insignificant amount of money anyway?
Thanks.
I have a repayment mortgage which was originally £730 per month for which I have made over payments in the past. I rang my lender 18 months ago to stop the overpayments and have my direct debit put back to the original amount. I've just realised that they in fact reduced my direct debit to £700. It seems that they recalculated the mortgage payment amount without telling me, in this way the loan would continue to be spread over the original 25 years rather than reaping the benefits of my overpayments. If I do nothing then I will end up paying about £4000 pounds more in interest than if my payment had been left at £730.
Are they allowed to do this? I know for sure that if I'd asked to reduce my payment below the original £730 they would say no, so it seems unfair they can do it on the sly,
If I complain, could they just agree my payments are wrong, and since underpayments are not allowed on my mortgage I owe them 18 x £30=£540 ? I don't have the money so maybe I should just keep quiet?
If I make a one off payment to catch up, and get my direct debit corrected would that resolve it? It still seems that I would be behind where I should be due to the cumulative effects of interest over that 18 month period, although maybe that's an insignificant amount of money anyway?
Thanks.