BoI Mortgage rate cut, but repayment rises?

C

Cervelo

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Just received a letter from BOI about a change in my tracker mortgage interest rate.

Current mortgage repayment €865.83
Current lending rate 1.150%
New mortgage repayment €899.20
New Lending rate 1.100%

Could this be correct that my rate goes down but my repayment goes up or is it a mistake from BOI ??
 
Are you finished getting TRS maybe? And it's coincidental that it happens this month?
 
Ususally when the letters come out from lenders with repayment details they dont include TRS. I know that's the case with Ulster Bank when I got my letter following the ECB drop.
 
Sarenco said:
A qualifying mortgage taken out in 2004 will continue to benefit from mortgage interest relief until 31 December 2017.
Click to expand...
Mortgage was used mainly for a pension contribution so I don't think it qualified for TRS
 
Cervelo said:
Mortgage was used mainly for a pension contribution so I don't think it qualified for TRS
Click to expand...

That's not it so - MIR only relates to loans used to purchase, repair or improve a borrower's sole or main residence.
 
Just back from the bank where I asked about my issue, the reason for my repayment going up while my interest rate is going down is because of a "point in time calculation" by the bank.
Apparently every time there is a change in the interest rates BOI do a recalculation in your payments so as to make sure your mortgage is paid in full by the end date.
This is done on all mortgages especially those that have had any restructuring like interest only period, missed payments etc. etc.

In my case I was on a interest only for a year in 2012 and then went back to full payments which were increased by the bank so that my mortgage would be paid by the pre-existing end date, so I have asked the bank to write to me explaining why I now have increased payments again
 
OK, that explains it.

In simple terms, let's say you owe €12,000 with 12 months to go. The repayments are €1,000 per month.

If you ask for a two month payment holiday, you will still owe €12,000 but with only ten months to go.

Even if interest rates don't rise, your repayment will rise to €1,200 per month.
 
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