Brendan Burgess
Founder
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Understanding the calculations
This is a very hard calculation to understand and explain. And AIB has not helped by doing it in a very convoluted way.
I will try to explain the principle
Let's say you have a €100,000 over 20 years at an interest rate of 5%.
Your repayments were €660 per month
After 5 years, you paid €39,600
so your actual account will be:
But your bank writes to you and says that they should have charged you only 1%
Your repayments would have been €459.89
After 5 years you would have paid €27,593 and your account will be as follows:
When the interest rate is higher, you pay off the capital more slowly.
Summary
This is a very hard calculation to understand and explain. And AIB has not helped by doing it in a very convoluted way.
I will try to explain the principle
Let's say you have a €100,000 over 20 years at an interest rate of 5%.
Your repayments were €660 per month
After 5 years, you paid €39,600
so your actual account will be:
But your bank writes to you and says that they should have charged you only 1%
Your repayments would have been €459.89
After 5 years you would have paid €27,593 and your account will be as follows:
When the interest rate is higher, you pay off the capital more slowly.
Summary
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