Sir, - I take issue with the statement: "Even an additional £30 a month put towards a typical mortgage repayment can have the effect of cutting a number of years off the cost of your overall loan, all due to the fact that you are repaying capital sooner, thus avoiding future interest payments" (Irish Times, January 5th, "Family Money" by Jill Kerby).
When interest rates mercifully fell, I allowed my existing standing order to the First National Building Society to remain unchanged, hoping that the effect described would occur. I noticed in my 1994 annual statement that I was about £400 overpaid, and on requesting an up to date statement in mid December 1995, saw that I was still overpaid by the same amount.
The extra money had not been credited to my mortgage account. I was told in the local office that the extra money was neither deducted from my account, nor had earned any interest. The FNBS only allows sums of five per cent of the original loan to be deducted from the account. - Yours, etc.,
Letterkenny,
Co Donegal.