Can any one explain this to me
We pay 1648.69 dollars a month on our home loan at a rate of 6.61% .Well we got a letter from our bank saying our payment is going up to 1868.41 dollars a month at the same interest rate of 6.61 % .At the moment we pay 412.17 dollars a week and with this change we will be paying 467.10 a week which is an extra 54 dollars a week which is an extra 216 dollars a month .so am wondering if someone may be able to explain how this could go up so much when the rate isnt changeing .Our morgage is around 265,000 dollars for 25 years .
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08-03-2012 15:00 #1Senior Member
- Join Date
- Jun 2008
Payments on home loan
08-03-2012 16:43 #2
The only thing I can think of is that it is changing from interest only to interest + principal. Or, that you where in a honeymoon period that is expiring....but you said the interest rate wasn't changing.
Did the letter give any reason for the increase?
I'd ring the bank for an explanation.
08-03-2012 17:08 #3Senior Member
- Join Date
- Jun 2008
We have had the loan for 5 years and its a varible loan .no real reason why the change just a we reveiwed your loan and we have decided to make you pay more .
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08-03-2012 17:27 #4
You definitely need to call the bank. It is very odd that the interest rate hasn't changed but the repayments have. It's like they're adding a fee or something. Or changed to payment schedule.
Very odd. I'd definitely get on the phone. It's very weird!
08-03-2012 17:47 #5
I had a similar letter from my bank a yr or so ago stating after a review of my loan, my payments were increasing even though there was no change in interest rate. After calling to clarify I was informed that after a previous rate increase, my repayments had not changed at that time. So they were in effect 'updating' the repayment to reflect that previous rate increase. After going through my bank statements and calculating the amount I should pay using a mortgage calculator it turned out they were correct much to my annoyance. I was surprised I'd overlooked it, but I had always assumed a bank is always quick to increase payments after a rate increase lol!
I would call them, I hope in your case they have made an error, good luck
09-03-2012 15:29 #6
Some banks ( ours homeside/ NAB) don't change repayments if interest rates go up or down unless you ask them to review your mortgage each rate change. They instead wait till the anniversary of your loan each year to review mortgage.
So if say there had been 4 rate rises ,but no review your repayments woud not cover owed amount, so when anniversary comes around theuy up repayments so that loan will be repayed at agreed time (years).
My repayments have nor changed in a year yet interest rates have dropped so the amount of interest accumulating it lower but payments same so Im paying off more...so when review comes around my payments will drop.
I make sure every rise I ring them staright away and with any drop ignore, . It is a pain and I wish they would just on rate change as they happen
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