Help with understanding mortgage and arrears balances

AtMyWittsEnd

In August last year, I had an outstanding balance on my mortgage of £130814.66 with arrears of £7015.23 An arrangement was put in place with the mortgage company for me to pay 'interest only' payments plus £60 per month off the arrears.

The interest only concession has come to an end and I am hoping to get them to extend it further while I put the house on the market as my circumstances have not changed, but I have been informed that my outstanding balance as of today is £130539.76 (reduced by £274.90) but my arrears are £7437.04 (an increase of £421.81)

Is it just me, or do these numbers not make sense? I have cleared the interest each month, so surely the numbers should both have decreased by £660.

I am not a financial expert and I am confused to say the least.

opinions4u

Arrears have increased due to paying less than the contractual monthly payment. Interest plus £60 being less than capital and interest.

The balance discrepancy could simply be the timing in the month and the calculation of daily interest.

AtMyWittsEnd

Thanks, but the contractual terms of the mortgage were changed to interest only (if only temporarily). But what you said about the outstanding balance makes sense.

opinions4u

AtMyWittsEnd wrote: »

Thanks, but the contractual terms of the mortgage were changed to interest only (if only temporarily).

That would be a concession, not a contractual change.

Different lenders will account in different ways. While I would agree with your view, it's how your lender does things that matters. Ask them.