Questions of cash: It pays to keep track of your mortgage payments
Saturday 30 May 2009
Q: We moved house in July last year. Nationwide redeemed our existing tracker mortgage against our wishes.
With difficulty, we had the sum outstanding at redemption 'ported' back onto the same tracker product. Because the original product was redeemed after five years and a new product issued for the remaining 19 and a bit years, we calculate that we will pay extra interest over a 25-year period, as more interest is paid in the early years than the later ones. The Financial Ombudsman Service tells us that as we have a repayment mortgage we should not pay more interest as a result of having the mortgage redeemed and reinstated. But in July 2008 – before the problem arose – the interest rate was 5.29 per cent and the monthly repayment £647.83. In December, the interest rate had fallen to 3.29 per cent and the calculated repayment was £565.77 per month. A 2 per cent interest rate cut should have resulted in monthly repayments falling to about £500 per month. MW, Rawtenstall.
A: Congratulations on keeping a close eye on the mortgage charge calculations. Your assessment is correct. In a statement, Nationwide says: "In line with our usual practice, an early repayment charge and redemption fee were applied on redemption and then refunded once the product was set up again on the new property. Unfortunately there was a delay in porting the tracker product and this was not completed until 8 January 2009. As a result of the delay, [the readers] were overcharged by £539.23 in interest on the tracker part of their mortgage from 31 July 2008 to 7 January 2009. An interest adjustment has now been made to [the] mortgage account and the balance has been reduced by this amount. Furthermore, we have extended the expiry date of [the] tracker rate to 31 August 2009, from March 2009. We calculate the interest lost as a result of a) the delay in refunding the early repayment charge and redemption expenses, and b) paying a higher rate of interest on the tracker part of the mortgage, to be £40.24 and £9.51 respectively. [The readers] have not been financially disadvantaged as a result of redeeming their existing mortgage, which was part way through the initial term of 25 years, and re-setting the new mortgage with a term of 19 years and 7 months." But, adds Nationwide, it has not provided you "with the level of service we would have liked" and it apologises "for the inconvenience and frustration that this has caused". It is offering you compensation of £200.
Q: I bought kitchen units from a local independent company in 2006 – a one-woman outfit who imports products from Portugal. This was completed in December 2006. The last invoice was given to us in December 2006, which I paid. It was clearly understood by both of us that this was the final payment. In March this year I had a letter from her explaining that her accountant had calculated that VAT on the purchase of £493 had not been paid. She admits that she made a mistake in her calculations and failed to include this in her invoice. Do I have to pay this? I had the money to pay it at the time, but our financial circumstances have since changed: my partner has lost his job and my income has fallen badly. We did not realise we had not paid everything. LL, Leighton Buzzard.
A: A supplier has six years (five years in Scotland) in which to invoice for goods supplied – and that includes invoicing to correct an undercharge. The situation might have been different if the bill had stated that this was a 'full and final invoice', but it did not. Nor are you certain that the supplier stated clearly, verbally, that this was a 'final invoice'. This is a genuine error made by the supplier, that you were unaware of. Susan Marks of Citizens Advice says there was "a mistake... which both parties should have realised". She adds: "As it is within the legal time limit, the outstanding amount remains outstanding in order for the contract to be fulfilled on the part of the purchaser. It's inherent when you make a contract that you are going to pay the price agreed, in the same way that you don't expect a trader to come back with a higher price. The trader has been open and honest about the mistake and made a reasonable request." You should now explain to the supplier that your circumstances have changed and that you are not in a position to make an immediate payment in full. You should instead offer staged payments at a rate you can afford. Given the mistake made by the supplier in not billing you properly at the time, she should be accommodating in accepting staged payments. We offered to contact the supplier on your behalf, but you decided – probably correctly – that a friendly approach from yourself would be better.
Q: My wife and I had a 25-year with-profits endowment mortgage with Norwich Union that matured in July last year. I have read that there is a possibility of a windfall for current policyholders. I also understand that this surplus was postponed last year. Do we have a claim on this windfall? SH, Newcastle-upon-Tyne.
A: No. Your funds were held in the Norwich Union Life and Pensions (NULAP) fund. Only investments in specified funds are eligible for the 'reattribution offer'. These are those held within the CGNU Life With-Profits Fund and the Commercial Union Life Assurance Company (CULAC) With-Profits Fund, including the Norwich Union Life (RBS) Ltd (NUL RBS) and Norwich Union International (NUIL) policies. To be eligible, policies must have been in force on 21 November 2006 and still be in force on the day reattribution occurs, which is not likely to be before late this year at the earliest. All eligible policyholders will be contacted in the near future inviting them to vote on whether they wish to receive a 'reattribution payment'.
Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: firstname.lastname@example.org
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
Simon Read: There may be trouble ahead for cohabiting couples who don’t make a will
Mark Dampier: Strong returns can be found if you go the opposite way to the crowds
Money Insider: Would £150 make you switch banks?
Gold-plated pensions – the key to retirement freedom?
Bargain Hunter: Find the deals that have real value beneath the Black Friday hype
- 1 To help fuel their propaganda machine against the poor, our government has now decided to redefine the word 'welfare'
- 2 Anti-gay hate preacher accidentally tweets 4,000 followers cartoon clip of him 'confessing' to be a 'homosexual sodomite'
- 3 Woman opens professional cuddling shop – gets 10,000 customers in first week
- 4 Grayson Perry: London needs affordable housing because 'rich people don't create culture'
- 5 Kenya bus attack: Al-Shabaab militants kill 28 non-Muslims who failed to recite Koran
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
France 'blocks' Russian sailors from boarding a warship
Revealed: How the world gets rich – from privatising British public services
Myleene Klass: Ed Miliband 'strikes back' by comparing UK's need for Labour's mansion tax to Hear'Say track
iJobs Money & Business
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...
£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
Day In a Page
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens