Extra interest payment added to mortgage

jlwhite

We have a 5 year fixed rate on our 22 year Santander mortgage and for some reason this month they have taken an additional interest payment of £101.59. We usually pay around £340 interest and around £500 capital repayment which both comes out around 3rd of the month. The additional payment came out 12/9. I emailed Santander and this was the reply I got.

Thank you for your recent request and I am now able to give you the following information regarding your Mortgage account. The interest adjustment you can see detailed in your online transactions is purely due to Santander internal reconciliation system. It doesn’t change the amount or timing of your normal monthly interest payment to your mortgage and doesn’t affect your obligations in any way If you have any further queries, please give us a call on 0800 7839738 or visit your local branch. Kind regards, Customer Services Santander plc

I have contacted them again but does anyone have any ideas as to why they have charged us this extra amount?
Thanks

foxy-stoat

When you contacted them again what did they say?

Have you got your original mortgage offer with a breakdown of the interest charges? Doesnt sound anything to worry about, I think my mortgage interest over the full term in well into 6 figures.

sammyjammy

I can't believe they didn't even inform you formally in advance! It certainly needs an explanation better than the one they have given, that would make no sense to the average man/woman on the street.

jlwhite

I haven't heard anything back from them yet today. Will call them tomorrow if I don't hear back. The only reason I noticed it was because I've been looking forward to dropping down below £170000 this month as we have been overpaying each month. Silly I know but feels like we're getting somewhere with paying it off.
The original paperwork said nothing about interest adjustments or extra interest being added to the debt any time they like! I know in the grand scheme of the amount of interest it's a drop in the ocean but £100 is still £100 and if they do this now they could do it again.

getmore4less

Have they actually taken a payment using your direct debit(or whatever payment you have set up) or is it just an adjustment on the mortgage account?

jlwhite

It's an adjustment added to the mortgage account

getmore4less

You may need to do some calculations of what the interest should have been.

Has there been any change in interest rate without a change in payment?

davidmcn

Swings and roundabouts - there have been several threads here by people who have received credits from lenders after recalculation of interest (though that seems to attract just as much suspicion). They're hardly likely to have made the correction without being certain about their sums - as above, do the maths yourself if you're not sure they've got it right.

Thrugelmir

Have you overpaid your mortgage by too much?

jlwhite

How would I calculate what the interest should have been? No change in rate since we re-mortgaged in June when our repayment amount went up by about £80 per month, I've been overpaying by £250 per month, nowhere near our overpayment limit.

kingstreet

Did you actually remortgage - as in a new mortgage from Santander to replace one with another lender?

If you did you may find this is accrued interest. That's interest from the date of completion to the end of the month of completion.

At £340 per month, your interest is £11.33 a day. An extra £101 is nine days interest which would fit with completion on 21st of the month.

Did you make a larger than expected first payment or was it what you thought it would be?

If you are mis-using the word remortgage and actually did a customer retention product on an existing Santander mortgage, the above won't normally apply.