Nationwide Mortgage - where have my payments gone?

jacqhale

Hi,
My husband and I moved into our house 5 years ago, paying £149,000 and putting down a 5% deposit making our mortgage total about £141,500.
We had a capital repayment fixed deal for 5 years which comes to an end next month. I have been looking for a better deal but can't find anything as we can't make the (ridiculous) 25% equity figure by about 3%!!
Anyway I overpaid about £2,000 in the first couple of years but then we took a mortgage holiday while I was on maternity leave. In hindsight this was a really bad decision but we couldn't afford the payments on one wage.
I thought the mortgage holiday stopped all payments and accrued the interest for that year when you started paying back - obviously our payments went up and because I was working part time we had to stretch the mortgage over a longer term to afford the payments.
Anyway, now I am looking to get a figure from Nationwide to look for a fixed deal but they are telling me we still owe about £140,000!! This barely takes into account the overpayments we made, let alone the capital payments we have made over the last five years. How can this be? Have I misunderstood what a payment holiday means?
We are finding Nationwide extremely frustrating to get information out of. They haven't provided us with the breakdown we have requested and this is not surprising since five years ago we tried to change the mortgage from my maiden name to my married name and five years on and 4 marriage certificates down they still haven't managed to do that!
I would really appreciate some advice on whether we totally misunderstood the payment holiday or whether Nationwide have our figures wrong and how to go about getting the real amount we owe so we can move on!
Thanks for listening, sorry for the long post!

Thrugelmir

jacqhale wrote: »

Hi,
My husband and I moved into our house 5 years ago, paying £149,000 and putting down a 5% deposit making our mortgage total about £141,500.
We had a capital repayment fixed deal for 5 years which comes to an end next month. I have been looking for a better deal but can't find anything as we can't make the (ridiculous) 25% equity figure by about 3%!!
Anyway I overpaid about £2,000 in the first couple of years but then we took a mortgage holiday while I was on maternity leave. In hindsight this was a really bad decision but we couldn't afford the payments on one wage.
I thought the mortgage holiday stopped all payments and accrued the interest for that year when you started paying back - obviously our payments went up and because I was working part time we had to stretch the mortgage over a longer term to afford the payments.
Anyway, now I am looking to get a figure from Nationwide to look for a fixed deal but they are telling me we still owe about £140,000!! This barely takes into account the overpayments we made, let alone the capital payments we have made over the last five years. How can this be? Have I misunderstood what a payment holiday means?
We are finding Nationwide extremely frustrating to get information out of. They haven't provided us with the breakdown we have requested and this is not surprising since five years ago we tried to change the mortgage from my maiden name to my married name and five years on and 4 marriage certificates down they still haven't managed to do that!
I would really appreciate some advice on whether we totally misunderstood the payment holiday or whether Nationwide have our figures wrong and how to go about getting the real amount we owe so we can move on!
Thanks for listening, sorry for the long post!

Every year you would have received an annual mortgage statement from the Nationwide detailing payments made and interest charged.

In taking a payment holiday. The mortgage balance would be increasing every month for interest charges.

In repaying a mortgage. In earlier years the majority of your repayment is for interest, with only a small element of capital. For example on a 25 year £150k repayment mortgage. After 15 years you would only have repaid £60k of capital. The remaining 90k of capital is repaid in the final 10 years.

Mrs_Bumble

In the 5 years you must have received an annual statement each year, on this it will detail the payments made and the interest charged each year. The balance doesn't really move much in the first few years of a mortgage as the interest payable is higher in the first few years as your balance is higher, it is only as the mortgage continues through its term that you chip away at the balance and the amount of interest payable becomes less and it swings the other way and you start to see the balance come down.

You made overpayments of £2K early on which was good but then you took a payment holiday of how long? You are right that you don't go into arrears or anything and the interest accrues, but in that period of time you haven't made any payments at all and so haven't chipped away at your balance at all and the interest continued to be due.

When you stretched the term you made your monthly payments smaller and so you then began chipping away at the balance at a lower level.

I have tried to make it straight forward but it is complicated.

If you look at the annual statements you will see what impact the payments and interest have had on an annual basis and it might be clearer.

But sounds about right.

TOPAZ_2

Hi,
If you cant find your mortgage statements-give them a ring about getting online access to your account (I have this and its very useful) - it might take a little while, but you would be able to look at each of the years of your mortgage transactions - might need to ask them how far back it goes.

I too took a mortgage holiday when on Maternity leave, and its surprising how much the mortgage went up - remember - they are still adding interest on a daily basis - and in addition to this there are no payments going in to reduce the capital - therefore your interest bill will be higher than it would if you had been making payments.

The other catch - is that you would pay off very very little capital in the first 10 years or so of the mortgage - your £2k is a good start though
Topaz

_Andy_

Also there may have been fees added to the mortgage at the start

jacqhale

Thanks for posting - I will dig out the mortgage statements tonight and have a good look through them. I understand that you pay off mainly interest in the start and it goes to more capital as you near the end of the term but it seems as if they are not even taking into account £1 of any of our payments which is the bit I can't get my head around. I know we won't have paid off much but even £1,000 doesn't seem unreasonable over 4 years??
Thanks for the tip about online access will get on to them about that as I do just about everything else online and it makes it so much easier!
Thanks again.

Thrugelmir

How long did you take a payment holiday for?

Even on rough figures your mortgage interest is in the region of £575 - £650 per month. So wouldn't have taken long to accumalate.

jacqhale

We took a payment holiday for 12 months.

belfastgirl23

It does sound right to me, sorry. When I was making full repayments but no OPs on my £230k mortgage, I was paying off somewhere in the region of £4k a year on the capital amount. That was what spurred me on to start overpaying.

PS my nationwide online banking will only let me go back to 2007 but it would still help you to see what's happenign. If you're still worried maybe it's worth seeing the mortgage advisor at your local branch.

_Andy_

jacqhale wrote: »

We took a payment holiday for 12 months.

The figures look about right then.

maninthestreet

jacqhale wrote: »

We took a payment holiday for 12 months.

At £600pm interest, that's £7200. Even with your £2000 overpayment, there's still £5200 left to pay.