Flexible Mortgage with Virgin Money - Issues

golfermad

I have a fixed rate 15 year mortgage with Virgin Money which has 5 years left to run. The mortgage has a borrow back facility allowing over payments and borrowing back any surplus if required. I have always had surplus in my account in excess of £20k even when I have borrowed back, but maintained the original monthly payment even though this was more than required. I recently made an enquiry of what my monthly payment would be if I took out all that I had overpaid. I was shocked to learn that my monthly payment for the last 5 years of my mortgage would go up by £345 per month over £20,000 more than I had expected). Can anyone explain this to me as I do not understand that if I pay the original monthly payment for the term of the mortgage then that should be it?

AnotherJoe

Is it a repayment mortgage or interest only ?

golfermad

It is a repayment mortgage

AnotherJoe

So have you always overpaid or at least paid the required amount? Because if so i agree this doesn't make sense.

One thing occurs to me, are you sure you paid the minimum amount? Because some lenders will reduce the payment due by DD if you overpay. So if that happened then that would make sense. You need to look at your DD payments and see what's happened did you think you were overpaying but actually they were just reducing the direct debit each month to take account of the fact you owe £20k less?

If not I'm stumped you'll have to contact them to explain.

getmore4less

Put up more details it will probably be more obvious with the information.

to start things off

original mortgage terms
current amounts and terms
the total with borrow back that you have to pay over the 5 years.

kingstreet

You sure it's Virgin Money (Northern Rock) and not a Virgin One, later RBS One Account?