Re: First year of repayment mortgage, WTF!

On Thu, 14 Sep 2006 13:18:42 GMT, Ronald Raygun
<no.spam@xxxxxxxxxxxxxxxxxxxxx> wrote:

Peter Saxton wrote:

On Thu, 14 Sep 2006 12:32:47 GMT, Ronald Raygun
<no.spam@xxxxxxxxxxxxxxxxxxxxx> wrote:
Peter Saxton wrote:

There is no split.

Of course there is, though it isn't usually made explicit to you in
advance, and of course the split isn't constant. You usually get an
annual statement which details how much interest you've been charged
during the past year and how much capital you've paid off.

You are wrong. It doesn't say how much "capital" you have paid it says
how much you have paid.

Have you been taking pedantry lessons from Tim?

It may not explicitly say how much capital you've paid off. But:

If it says how much you've paid, and how much interest has been charged,
then the difference is how much capital you've paid off.

Why? Using your logic you could be paying off the capital and owing
the interest.

The situation is still as I have stated.

Also, it will say what your balance outstanding is at the end of the year.
It will also say what your balance was at the start of the year. Except
inasmuch as the balance is contributed to by interest on interest not paid
when due, all of it will be capital. The difference between the start and
end balances, therefore, is how much capital you've paid off.

No. It's how much the balance has reduced. If you don't pay anything
in a year what is the figure brought forward to the next year? Is it
partly capital and partly interest or is it the amount outstanding?

I don't know of any mortgage lender who keeps track of what is
outstanding split by interest and capital.

--
Peter Saxton from London
peter@xxxxxxxxxxxxxxxxx
.

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