Incorrect debit taken?

[celticbhoy32]

Hi all, trying to get my head around something here, would appreciate others input. Current mortgage with aib circa 150k remaining. On ltv of >80% was 3.4 now 3.15.
Ok so issue I have is since March this year I have been over paying the mortgage by 500 pm via standing order. This reduced the amount I'd have to pay by around 3 euro the following month as term remained the same. In September this year I received a letter informing of the rate reduction (from 3.4 to 3.15) which would be implemented on 1st Nov. The letter also gave me my new repayment of 945.27
Fast forward to 2 days ago when my DD hits and 959 euro is taken from my account. I email aib re this clear error and get the following reply


I refer to your below and would like to thank you for this opportunity to explain the repayment details on this account from September to December.


"As you know the monthly repayment value on this account on 06/09/2017 was €965.69 which was paid by direct debit. Following this our variable rate change decrease was announced and you received our letter referenced in your mail below and attached confirming the monthly repayment value of €945.27 commencing in November.


We then received your standing order lodgement of €500.00 on 05/09/2017. Your October monthly direct debit was processing then and following completion of the October payment we revised your monthly repayments forward per your lodgement and the interest rate of 3.40% on your account at that time. While the interest rate decrease was announced in September it was not affective until 01/11/2017 therefore our October revision was completed per your lodgement and the rate at that time. When our new interest rate did come into effect on this account on 01/11/2017 your repayment schedule revised to €942.17 but your November monthly repayment (that was a reflection of the old rate) had already begun to process and call from your funding account.


I confirm your next repayment (if not other lodgement is received in the interim) will be €942.17 on 06/12/2017. I hope you can understand that all revisions and changes on this account following the 22nd September would render the information if that letter inaccurate.


I Hope this has answered your questions"

This seems a bit absurd to me that an extra payment to reduce my mortgage would leave me paying more for the month of November?? Anyway as I said I can't get my head around it are they correct in their reply? Appreciate the replies

 

[Seagull]

What period does your last payment actually cover? You typically pay for the previous month, rather than the next month. Assuming that is the case, and given that you have already made the payment, then the interest rate change would only apply to the date from 1 November to the date your payment was made.

 

[celticbhoy32]

Hi thanks for reply. Debit comes out on 6th. As said they had already notified me in a letter in September saying my payment in November would be 945 coinciding with their announcements of ltvs being cut. I don't see how me over paying the mortgage should see the rate revert to 3.4% and thus paying 959 instead.

 

[RedOnion]

It's a limitation of their system/process. When you made the overpayment in Oct, it would have triggered a recalc that overwrote the amended amount for rate change.

You should see a few euro reduction in your December repayment if they recalculated your repayments for you now.