Can't understand my mortgage Statement on a 5 yr reduced interest with UB

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Cashstrapped

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I received my mortgage statement from Ulster bank which shows my outstanding balance and payments and interest paid.

I have been in the lucky position of getting a 5 year deal with Ub at .5% which started in June 13 down from a Variable rate of 4.5%. However on my mortgage statement it states the rate is 4.5% so I rang them to confirm I was on the right rate, having spent 20 minutes on the phone with them I'm still none the wiser.

My outstanding balance is 141k and a term of 14 years left, I am currently paying 611 per month of which 16.94 is going off my principal the rest in interest however before the 5 year deal I was paying 696 which was interest only.

Anyone shed any light on how much the interest would be on the balance at .5%, would it be almost 600 or any idea of how I can check if I am being charged the agreed rate of .5% as I was advised by an Ulster bank rep today to seek financial advice if I don't understand it but I'm not in a financial position to pay for it as im already struggling to pay agreed mortgage, no arrears though, thanks
 
Interest only @ 4.5% on a balance of €141,000 is €528.75 per month.

Interest only @ .5% on a balance of €141,000 is €58.75 per month.

The reduced rate is a ninth of the original rate so the calculation changes accordingly, the monthly interest could not be remotely near the original figure with that huge reduction in rate.

You are either still on a higher rate or there is a much larger amount coming off your principal each month.

Are you sure all the figures you gave are correct? Is the actual balance now 141k?
 
Hi thanks for the reply sorry figure is actually 151k my mistake, there is 13 years and 4 months left on it.

Interest charged 6889
Mortgage payments 7340

That's what I don't understand they said the mortgage statement has to show original agreed interest rate, end of letter says from 1 January to 31 December the interest rate charged on your borrowing was 4.5%.

I worked it out similar to you above but their agent was getting very frustrated with me saying I was on a good deal (which I know it is if I'm actually getting it) she kept saying that interest is being charged at .5%
 
I have not done a specific calculation but from a mental arithmetic calculation it is patently obvious that you are not on a .5% rate but you are on the 4.5% rate from your figures. Was there a reason why you were "given" the .5% rate because I cannot understand why you would get a .5% rate.
 
There is something wrong there, were you talking to someone on the phone in Head Office? Can you go into a branch and ask a mortgage advisor to have a look at it, it should be clear to them what is or is not being charged.

What was the plan if you are on .5%, if they were interest only payments then the payments would be tiny and there would be huge ones coming when the balance had to be cleared in 9 yrs or so.

How much has the principal balance on the statement come down by since 1/1 to 31/12?
 
All of these agreements are through MARP Dermot, i cannot say why i got the reduced rate other than to say i have worked with Ulster Bank from the start of when i was made redundant and have complied with all of the MARPagreements but this is the final last straw before i will have to sell my home although not in negative equity, i am hoping i will find employment in the meantime and my agreement is to update them of circumstances. There is also another personal reason that they took into account that I would not like to discuss but I believe played a part in giving me the opportunity to try keep my family home.

Monbrieta, my agreement is to pay the 611 which was to result in the capital being reduced down which hopefully will make my mortgage sustainable should i find employment. I spoke to their mortgage support office today, but i will drop into my local branch tomorrow to see if they can make sense of it. The agreement is i will increase payments if my circumstances change within the 5 years but if at the end of the 5 years my financial position has not changed to allow me repay full payments then i will sell my home.
 
Well the ideal answer would be that there is a massive amount coming off the capital every month out of your 600 payment as the interest hopefully is 60 quid or so. Try and get someone tomorrow who looks as if they might know something :) i.e. old enough to have a bit of experience.
 
Thanks I will, a total of 684 euro and a few cent came off my principle for 2004, this includes a small amount of trs, thanks for advice
 
Sorry Cashstrapped I had no wish to pry into your personal business. I just could not understand your rate. Your .5% rate is very good if you can make it stick. Is there a written record of this agreement from the bank anywhere.
 
No problem Dermot I'd say it did have an impact on their offer to me. I agree the low interest is very good, I have a signed offer from them to me with regards to the rate, lets hope its worth the paper its written on, that's why I cant understand the statement, their telling me today to ignore that 4.5% but the outstanding balance she quoted to me today is within a hundred euro of the statement balance showing 4.5%, thanks all for your feedback
 
Rough calculations assuming you were on 4.5% for the first 6 months you would have reduced your mortgage by €350 in that period and in the next 6 months assuming the .5% was in force you would have reduced the mortgage during that period by €3,300 making a rough total of 3600 of a reduction. Your balance should be around €147,400 now (151k - 3.6k).
Maybe you should try and call to MABS with all your paper work and get MABS to write to them and get a written explanation.
Did you have anyone help you through the MARP process. If you did get them to word a letter to the Bank.
You could also write to them yourself asking for a break down of the interest from 01/01/2014 to 12/06/2014 @ 4.5%. and then the breakdown of Interest from 13/06/2014 to the 31/12/2014 @ 0.5% and see what this brings you.
You could also ask them to show this calculation on a monthly or quarterly basis showing the balance outstanding and reflecting the repayments.
You could enclose a photocopy of your agreement showing the 0.5% interest rate.
I prefer written to verbal contact in this type of situation. In the meantime keep up your repayments as agreed if at all possible so as not to give the Bank any wiggle room in relation to your very good agreement.
In the meantime the best of luck and as Monbretia says give us a update.
 
If the 0.5% deal started in June 2013 then all of 2014 should have been at this rate.

In my experience UB are particularly useless - we also engaged fully with them in MARP and found them to be completely incompetent - everything we sent in was ignored or lost, our tracker rate was removed without even informing us, I could go on....

I suspect that what happened was that the desk-monkeys in ASU (arrears support unit) didn't bother entering the new rate and so the old rate continued to be applied to the account.

If you have the letter offering you the lower rate then they will have to honour it - write a letter to their complaints department (slightly less incompetent) enclosing a copy of their letter and ask them to reissue the mortgage statement with the correct rate applied.

Good luck and try not to let them upset you too much - some day your circumstances will improve and you will no longer have to deal with them. Also remember that their complaints dept know how useless the ASU is and can be quite generous with the compo!
 
I mistook June 13 for 13th of June 2014 in my replies so my calculations are wrong. Thanks corkgirl1. Sorry to cashstrapped so my rough calculations would be more appropriate to 2013.
So Cashstrapped should have in real terms reduced the balance by approx €3.600 to approx €147,400 at end of 2013
€147,400 @ 0.5% would incur about €737 per year in year 2014. I am not taking into account a reducing balance but would not be significant given the interest rate.
Cashstrapped is paying €611.00 per month by agreement which equals €7332 per year
So €7332 paid less the €737 interest means that the amount outstanding should be about €140,805 at end of 2014. These are rough calculations.
So Cashstrapped by keeping up the agreed payments should see the mortgage reducing by approx €6,600 per full year and €3,300 in the final half year.
Cashstrapped make sure that their calculation is done out clearly from the time this agreement started and is done on the amount outstanding at that time and allows for your €611 monthly repayment at the 0.5% rate.
Sorry for my misread.
 
Hi Cashstrapped

1) You have a letter from them confirming a rate of 0.5% for 5 years. The letter presumably told you what the repayment would be?
Ulster Bank gave out these interest rate concessions as an alternative to split mortgages. As a result, almost all of your monthly repayments should go to reducing the capital balance.
2) You have been making the agreed repayment.
3) Ulster Bank has not adjusted the interest rate. This is their mistake.
4) Their systems and their administration are terrible so it will take you some time to sort this out.

But don't worry about it. Write a letter to them enclosing the statement and the letter with the 0.5% rate and ask them to apply the correct rate and correct it.

They will do it eventually. In the meantime keep up the repayments.

Brendan
 
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