First active tracker mortgage

[Shaz]

I have a current account tracker mortgage with First Active. I have just found out despite the ECB rate cut, my monthly repayments will not be reduced unless I write to the bank to request it. This will mean, however, that I will be paying more towards reducing the capital as interest payments will be reduced? My question is whether I should ask for a reduction in monthly repayments? Will the term of the mortgage be reduced if I kept the same repayment amount?

Thanks.

 

[agapanthus]

Yes, if you keep your payments at the old higher rate then you will pay off more capital and the mortgage will finish earlier. Other option would be to reduce the payments to what they should be and use the surplus to fund a regular monthly savings account of which there are several banks providing rates which would be in excess of your mortgage rate. All depends what you want yourself, lower monthly outgoings, shorter mortgage term or maximum return

 

[WhatsGoingOn]

I have a current account tracker mortgage with First Active. I have just found out despite the ECB rate cut, my monthly repayments will not be reduced unless I write to the bank to request it. This will mean, however, that I will be paying more towards reducing the capital as interest payments will be reduced? My question is whether I should ask for a reduction in monthly repayments? Will the term of the mortgage be reduced if I kept the same repayment amount?

Thanks.

I have the same mortgage. Where did you hear that you need to write to them? I didn't receive any notification of that.

 

[Shaz]

I rang them when I wanted to find out when I would see the effect of the Oct 08 rate cut.

Do check your monthly mortgage repayments. I have noticed that they increased the repayments in the same month that the interest rate increased but they told me on the phone that with the Oct rate cut, I won't see effect till Nov payment. My repayments are made around 25th of the every month.

 

[Askar]

You need to double check that your extra payments will in fact go towards capital prepayment on the date it is made. I switched because the First Active tracker did not do this until capital prepayments of more than 5% of the original loan amount was paid into the account. Up until this amount paid the capital prepayments were left in limbo.

 

[minion]

Dont mind First Active. They are notorious for telling you you have to do this and that when you dont have to at all.

A famous one of theirs is to tell people who ask to pay off lump sums off their mortgage that they cant process it unless they pay 5% of the total. This is just to make people go away and not redue th term of their mortgage and is actually illegal.

Another one is to take overpayments and put them in a holding account for the customer and not actually using it to rduce the amount owed, until the customer finds out and makes them. but they have already made their few quid.