[Anonymous]

Hello there, I hope someone can advice, but I hope no one has had this problem!

Summary:
What processes or Watchdog organizations are available in Spain (and/ or Europe as a wider picture), if you think your bank has incorrectly re-evaluated your mortgage OR is over charging?

Details:
We have just had our annual mortgage re-evaluation, and it has gone up. We queried this as we had been told verbally last year that our annual base rate was re-evaluated on the “Euribor 3 month” rate – and it is not possible that it could go “up” if it was based on 3 months.
In the process of doing this, we also looked into last year’s rate, which was 1.51% (we have a very low mortgage – Euribor + 0.18%), when I calculated what we SHOULD have been paying last year and what we DID pay, I found that we seemed to be over paying by almost 25euros a month. This extra equated to an additional 0.18%, “on-top-of” the 1.51%. I then double checked and found that the 1.51% was the total rate (1.33% Euribor rate + 0.18% differencial)…So where did the extra 0.18% come from?
I then went and checked the total % rate for the 2 previous years (5.5% and 4.7% respectively) and found that the calculations worked out almost exactly as we had been paying them (allowing for up to 4 decimal point variation). So, the calculation formula is correct – the only deviation was in last year’s payments, when we should have paid 1.51% but actually seemed to be paying 1.69%.
To top it all off I went to 12 different mortgage calculators (including INGdirect.es, Euribor, Associación Hipotecaria Española…and many more) and found that they also came out with exactly the same numbers: We paid correctly for the 4.7% and 5.5% year, but were paying more than we should have for the 1.51% year.

I have sent an email to the bank explaining my calculations, questions, and explaining how it seems we’ve over paid for a full year. I had called this time last year, as I had thought we were paying more than we should have, but they told me it was correct…(and we had a new baby and my brain was not exactly up to full speed).
I am still awaiting a reply from the bank, but in anticipation of a “no idea what you are talking about” response, I’d like to know if there are official channels, watchdog organizations to approach with this.

Many thanks for taking the time to read – and for any advice that can be offered.
Ruth

[Anonymous]

Are you 100% sure you are doing the calculation correctly.

If you post the:-
annual interest rate
Number of months outstanding at the revaluation point
Capital outstanding at the revaluation point

I can do a quick check.

I assume it’s a repayment mortgage and the monthly amount covers interest and capital only (no insurance)

[Anonymous]

I’m pretty sure I’m calculating correctly – but I’d be very happy to have a second opinion:

the mortgage was taken out for a total of 285,000euros
the total rate of interest was 1.51% (1.33% + 0.18% differencial)
at the time of this rate change there was 336 months outstanding
I don’t have the exact number of the oustanding capital, (I have been doing all my calculations on the TOTAL capital borrowed), but the outstanding capital at the time was about 276,500euros (give or take 100euros).

Many thanks
Ruth

@jp1 wrote:

Are you 100% sure you are doing the calculation correctly.

If you post the:-
annual interest rate
Number of months outstanding at the revaluation point
Capital outstanding at the revaluation point

I can do a quick check.

I assume it’s a repayment mortgage and the monthly amount covers interest and capital only (no insurance)

[Anonymous]

Ahh I see.

Well your calculation is flawed, you cannot calculate accurately when you don’t know the exact amount of capital outstanding and given the size of the mortgage and the discrepancy (25 Euros) then guessing now without doing any calculations I bet your mortgage is correct. Or are you forgetting that the term is now 2 years less (see my assumption below).

Anyway here goes. I have to guess the original term of your mortgage, if I am wrong then this calculation is worthless.

I am assuming it was for 30 years as you have stated you have had it for 24 months (2 years) prior to the new calculation and you have 336 months left. Hence 336 + 24 = 360 (30 years)

I make it you owed £276,515 at the end of year 2. Also I have assumed that year1 was the lower rate. If not then the calculation will be incorrect by a few Euros.

So as you can see I make your new payment £1009.67 (this might be incorrect by 1 or 2 Euros as the banks calculation may be slightly different such as daily interest calculation, but it won’t make a big difference.

[Anonymous]

Many thanks for all the time and effort towards this! It is really appreciated.

Your assumptions were correct – and with all this, can I be cheeky and take up more or your time? what calculations do you get for a rate of 1.6% starting with the capital (year 4) of 268,520euros. I am getting 1052euros per month – does this seem correct
Again, thanks a million – your help has been invaluable.

Kind regards
Ruth

[Anonymous]

268,520 Euros to be repaid over 27 years (which is what I assume you mean when you say starting year 4 of a 30 year mortgage is :- 1021.17 Euros per month.

BTW you didn’t say whether you were wrong and the bank was right 😀

If you meant 268,520 Euros to be repaid over 26 years then yes 1052.60 Euros per month

[Anonymous]

Many thanks –
unfortunately the bank were right (sad to admit), but at least I know what I was doing wrong now, and your help has been invaluable at putting my mind to rest (al-be-it that we don’t get to grumble at the bank a bit more).
😳

Is there any way to rate answers / help given? This has been superb!

[Anonymous]

jp1
well done and thank you for that.

[Anonymous]

What a star you are jp1!!

[Author]

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