Hi Moho
Ask the Bank to provide you with a copy of their calculations. Then you can check them.
Here is a quick way to check if it's about right
1) Get a list of the rates you should have been charged
History of ECB rate
2) Get a list of what you were actually charged
3) Multiply the balance by the difference
So
1 July 2010 to 31 Dec 2010 - charged 4%
Should have been charged 1.6% (ECB 1% + 0.6%)
Overcharge 2.4%
Balance €100,000
Refund due €2,400
2) 1 Jan 2011 to 31 March 2011 4.5%
Should have been charged 1.6% (ECB 1% + 0.6%)
Overcharge 2.9%
Balance €99,000
Refund due €2,376
etc.
I might do a Key Post on the topic.
Other issues to check
1) They should pay you a cheque for the money and not simply reduce the balance on your mortgage by the amount
2) Check that they are using the right rate.
We have also lost out on use of this money for the last 3 1/2 years so think they should pay interest!What is the situation with compensation even.
By refunding you the overcharge, they are effectively paying you interest.
If the overcharge put you into a position where you were paying interest at higher rates on other borrowings e.g. your credit card, you might have a valid claim.
But focus first on getting the money back and correct.
Brendan