Thanks for the reply Paul. Yes I have annual statements, and I have mocked up a portion of the 2021 statement to show how they are calculating it. See attached. (not actual values obviously). It seems like they charge me the same interest all the time, even after I have made lump sum payments, but then they seem to work out the value of the interest that is forgone by my lump sum payment and they also knock that value of my capital sum too. It's probably all in order but it seems an overly complicated way to work it.@davy200 Can you request a statement, e.g., of the last 12 months' transactions on your mortgage account, from Pepper?
Thanks for taking the time to look at this Brendan. As per my reply to Paul earlier, my monthly direct debit payments stay the same, no matter how much I make lump sum payments, but the extra interest that should not really have been payable, seems to get knocked off the capital sum too. The lump sum payments that I have made in recent years show up (when I login to Pepper) as arrears, see attached. Again, it might all be correct but seems overly complicated. It certainly wasnt always done this way, but I don't remember any communication about this changed way of working@davy200
Pepper seems to be having problems with their systems for issuing statements.
Pepper: unable to provide basic statements
Hi, I have a relatively small commercial loan administered by Pepper (old NIB loan). Requested interest certs/statements at end of January. They advised they could issue them after a couple of weeks due to a "system issue". Since then, not heard a whisper from them. No written explanation...www.askaboutmoney.com
However, you will need to get them because you need to check that they are doing it right. They have made mistakes in the past, but mainly on the calculation of arrears.
In simplified terms...
If you have a mortgage of €100k at 12% interest, your monthly interest charge and payment should be €1,000.
If you make a repayment of €10,000, the statement should show a balance of €90,000 and your interest charge should fall to €900 for the month and if they have a direct debit, they should only suck €900 from your current account.
Some lenders do show the capital amount as €100k and "advance payment" or "negative arrears" of €10,000.
As long as they are charging you interest on the net balance of €90,000 that is fine. Messy, but fine.
Your statement should clearly show the calculation of interest and the repayment you have made. So, it might look like the following:
View attachment 6699
The key figure is that they calculate the interest on the net amount. It's not that important whether they take out €1,000 or €900 repayment.
When I say your statement should be like the above, in practice, some lenders have really complicated statements with their own internal codes which you have to guess what their meaning is.
Brendan
yes thats the lump sum payments that I make ad-hoc. Thanks for taking the time to look at this.@davy200
OK, so they are arriving at the correct answer. They are giving you a credit for the negative arrears balance.
What is the bank credit of €428.57? Is that an extra amount you are paying every month?
Brendan
The lump sum payments that I have made in recent years show up (when I login to Pepper) as arrears, see attached.
Maybe I misled you there, the Pepper online account doesn't show payment history, etc. It just shows the current balance (what they call the Principle balance), then the arrears balance, which is the correct total of the lump sum payments that I have made, and finally the date and amount of the next payment.You didn't attach that. I would be interested in seeing it.
The main thing is that they are calculating the interest correctly, if complicatedly.
I agree the direct debit should be falling each month, but as you are overpaying anyway, that is not relevant.
Brendan
yes thats how it is presented. thanks againYou are neither advantaged nor disadvantaged.
I presume that attachment shows something like
View attachment 6709
It is a confusing way of doing it.
Brendan
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?