The mortgage company calculated our biweekly payments based on monthly payments…?

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My wife owned our home prior to our marriage. Just recently we have been talking about moving to a larger home so I started looking at our financial status. I started with trying to figure out the amount left on the current mortgage but ran into a little problem. It appears that the mortgage company created our mortgage by taking a 25 year amortization based on monthly payments, then halving the monthly payments to make the biweekly payments we have been paying. I know that it thus creates an incorrect calculation for a payment monthly of 840 is equal to 10080 and the actual payment of 420 biweekly equals 10920 a year! The payments calculated do not fit the information laid out in the loan papers.

My questions, keeping in mind that we are in Ontario, Canada is:

1 – What recourse do we have against the lender for making such an error?
2 – What options legally do we have against the lender for making calculation errors like this on official documents.

1 Comment
  1. Reply
    Sheri G
    April 29, 2011 at 8:53 pm

    They haven’t necessarily made an error. Many financial institutions recommend doing exactly that so that you end up making 1 full month’s payment extra each year in order to pay down the mortgage faster. The extra $ 840 goes all to the principle.

    Usually, in the discussions with the lender as to whether to make monthly or bi-weekly payments, this scenario is discussed. And there is usually something in the “fine print” that outlines how the bi-weekly payments work.

    You basically have no recourse – unless the extra payment did not go to the principle. Assuming it did, you have no loss to make a claim for.

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