FNB bond payment query

[saturnz]

So after the interest rate hike I noticed my bond payment actually went down instead of going up. With this arrangement the bank is effectively stealing from me by farming more interest out of the reduced payment since the capital portion of the monthly payment is reduced.

I call the bank and after 20 or so minutes of explaining myself to the agent, she tells me she will send the question to the relevant department who in turn will get back to me within 48 hours, this was last week Wednesday.

This week Wednesday I call the bank to follow up on the query and basically go through the same process, this time they commit to responding to the query within 24 hours.

Now it is Friday and I call them back. I am no longer interested in the original query but rather as to why they have yet to respond to the query despite them committing to do so, at this point I've wasted 45 minutes of my own airtime.

After throwing my toys out of the cot they have committed again to responding to the complaint and query today, but I have my doubts.

 

[Uli]

Nothing new, FNB customer service is up with MTN these days.

 

[AlmightyBender]

Hmm they would only be farming for more interest if they increased the term of the bond i.e. making you pay a slightly lower amount for longer. First confirm that this is the case through an ammortisation statement.

If your term has not changed then you are indeed scoring.

 

[nicbst]

Premier@fnb usually get back to me within a day or two.

 

[Other Pineapple Smurf]

So after the interest rate hike I noticed my bond payment actually went down instead of going up. With this arrangement the bank is effectively stealing from me by farming more interest out of the reduced payment since the capital portion of the monthly payment is reduced.

I call the bank and after 20 or so minutes of explaining myself to the agent, she tells me she will send the question to the relevant department who in turn will get back to me within 48 hours, this was last week Wednesday.

This week Wednesday I call the bank to follow up on the query and basically go through the same process, this time they commit to responding to the query within 24 hours.

Now it is Friday and I call them back. I am no longer interested in the original query but rather as to why they have yet to respond to the query despite them committing to do so, at this point I've wasted 45 minutes of my own airtime.

After throwing my toys out of the cot they have committed again to responding to the complaint and query today, but I have my doubts.

My bond is suppose to have the function where I can set my payment amount (eg keep at min payment, set min payment + x amount or set amount higher than min payment).

And it is not available on my online banking where I'm suppose to manage it.

Perhaps ask them to add in this feature but I understand your frustrations: My first bond goes off my FNB cheque account on 2 Dec and bounces due to EFT delay from my Capitec account - no problem I just deposit directly into my bond.

My bond goes off on 2 Jan and I get my notification then I get a notice to say its been reversed. DAFUQ!!! There were funds in the cheque account.

Then this month I'm doing shopping and my Capitec card no longer has funds (R6K gone). Turns out FNB decided to switch my debit order from my FNB cheque account to my Capitec account without telling me.

So yeah, another unhappy F(uc*ing)NB customer

 

[TheRidDlerX]

I have yet to notice the effects of the hike in my own premium, so it will be interesting to see if what you say is true. If so, ill be having that phone call also!

 

[P924]

It is also possible that you have paid in extra, and they recalculated your premium based on the amount outstanding and the remaining time on the bond. I usually don't bother with the amount on the debit order, as that is the minimum I pay, but I always pay in a lot more...

 

[Rocket-Boy]

It has never made any difference to me what the installment is because I always pay in extra each month.
For what its worth mine kept going down each month the more I paid in to try and keep the term at maximum and extract as much interest as possible. In a couple of days time I will be finishing the bond off, at 15 years short of the term Im pretty sure its saved me a ton of interest.

 

[Dr Who]

Hmm they would only be farming for more interest if they increased the term of the bond i.e. making you pay a slightly lower amount for longer. First confirm that this is the case through an ammortisation statement.

If your term has not changed then you are indeed scoring.

I Disagree

If you have paid in more than you needed to over the life of the bond, often when a rate hike happens it will estimate your new payment based on Interest, Period left and Present Value of the loan.

If your payments went down and the interest portion went up then your statement above is incorrect and the bank would be farming more interest. As the interest component would have increased based on a rate hike and now if the total payment decreases then the balancing figure would be the capital amount ( which has been reduced ).

This would lead to a lower capital payment and hence more interest.

 

[Shayd]

The easiest thing to do is to set your bond repayment at a fixed value higher than your repayment. Even a couple of hundred bucks on a million rand bond will lead to a much shorter term and you don't really have to worry about interest rates in this case. I have all my spare cash paid into my bond each month and my repayment is about 3k more than it needs to be. I haven't cared about interest rate moves in years and the interest rate would have to skyrocket before my repayment would be pushed higher.

 

[saturnz]

It is also possible that you have paid in extra, and they recalculated your premium based on the amount outstanding and the remaining time on the bond. I usually don't bother with the amount on the debit order, as that is the minimum I pay, but I always pay in a lot more...

I have indeed paid in extra, to the extent that the bond is nearly settled, so had they really taken that into account my bond payment would be one sixth of what it currently is.

Also they cannot take that into account unless I instruct them to do so. I have been making additional payments since I incurred the bond debt so that angle has very little merit.

As to the issue of farming, even if my term has not changed, the fact that my bond payment is less than what its supposed to be means that the capital portion I pay in every month is less, so therefore I will be paying a higher interest charge had the bond payment been higher.

Also I forgot to mention in the original post that my interest rate increased with the interest rate hike.

I am no longer concerned about this issue though but by the fact that they simply did not respond after committing to do so twice. The service is simply disgusting.

 

[Dr Who]

Scary stat, I took out my new bond and transfer happened on the 17th of the month ( Jan ) I elected to pay a full months installment and it has the following positive impacts:

1) The capital portion is the same capital as i would have paid after my 4th installment
2) I have reduced the term by 20 months.

Compound interest at its best....

 

[saturnz]

thats why paying down your bond as quickly as possible is seen as the best investment for those who do not have sufficient financial knowledge to actively manage their portfolios.

 

[Hendrix]

I have a bond with FNB, and my payments went up, I was expecting it to go down as I pay extra each month.
So I had to call them and request a recalculation, seems they don't do this automatically when rates change.
Standard Bank does this by default on my other bond.

I actually prefer that they recalculate it often, as my payment comes down and I can pay more in manually.
@saturnz, they are not stealing from you, your payment has decreased, and therefore the amount going into the principle and interest portion has decreased