variable interest rate on mortgage arrears

tifo

I've come across this today ...

I paid a lump sum of £2,000 a few weeks ago towards my mortgage arrears. However, the interest on arrears is more this month than last month, even though they're now £2,000 less. I enquired about this and was told that arrears are on a variable interest rate which changes, capital is on the normal rate, so I'll have to call every month if I want to know how much to pay. This is the first time I've heard of this and thought the whole balance, capital and arrears, was on the same interest rate which i'm informed of when it changes. I've never been told that arrears attract a variable interest rate.

Can anyone shed any light on this?

Thrugelmir

Is your mortgage currently a fixed term product?

tifo

Thrugelmir wrote: »

Is your mortgage currently a fixed term product?

No, it's on SVR, which is the rate they inform me of when it goes up or down following the BoE rate.

They seem to be charging me a different rate on the arrears in some months, which i've never been told about.

I thought the same current SVR applied to the capital and arrears balances.