Mortgage Holiday - Coronavirus

Nunnas22

Santander says 'If you take a mortgage payment holiday, this means that you wouldn’t make mortgage payments for up to three months and we’ll add these payments onto your mortgage balance. As a result, your mortgage balance will increase and your monthly payment will be recalculated over your remaining mortgage term."

I find incredible that they ADD the holiday payments to your total. That's not help, that's banks once again taking advantage. Surely the mortgage total should stay the same, you just pay the amount off over a shorter time. Are all banks doing it this way? Ok, maybe the interest, but not the whole payment. It's wrong.

Thrugelmir

The wording isn't clear. Only interest will be added to the mortgage balance. The capital that would have been repaid is spread over the remaining months of the mortgage term once the holiday ends. 

Nunnas22

That's what I thought would be the case, but the wording is very misleading. I think they are trying to put people off!

Thrugelmir

Nunnas22 said:

That's what I thought would be the case, but the wording is very misleading. I think they are trying to put people off!

There'll be many that see the word Holiday and fail to understand the longer term consequences unfortunately. 

EverythingIWant

Thrugelmir said:

Hi Nunnas22 said:

That's what I thought would be the case, but the wording is very misleading. I think they are trying to put people off!

There'll be many that see the word Holiday and fail to understand the longer term consequences unfortunately. 

What are the longer term consequences? I didn’t think anyone could be penalised for having a mortgage holiday in extra-ordinary times? Taxpayers bail the banks out the banks should show the same compassion to the taxpayers.

rexmedorum

EverythingIWant said:

Thrugelmir said:

Hi Nunnas22 said:

That's what I thought would be the case, but the wording is very misleading. I think they are trying to put people off!

There'll be many that see the word Holiday and fail to understand the longer term consequences unfortunately. 

What are the longer term consequences? I didn’t think anyone could be penalised for having a mortgage holiday in extra-ordinary times? Taxpayers bail the banks out the banks should show the same compassion to the taxpayers.

As far as I understand it it shouldn't affect your credit rating or cost any fees. However interest will add up during the holiday (to be paid afterwards and spread out). So you would end up paying more overall. It's just because some of the payment would have ordinarily gone towards paying the mortgage, but now instead it doesn't.

Thrugelmir

EverythingIWant said:

Thrugelmir said:

Hi Nunnas22 said:

That's what I thought would be the case, but the wording is very misleading. I think they are trying to put people off!

There'll be many that see the word Holiday and fail to understand the longer term consequences unfortunately. 

What are the longer term consequences? I didn’t think anyone could be penalised for having a mortgage holiday in extra-ordinary times? Taxpayers bail the banks out the banks should show the same compassion to the taxpayers.

The increased debt still needs to be repaid. There's no such thing as a free lunch. Banks are showing flexibility that's compassion. 

EverythingIWant

Thrugelmir said:

EverythingIWant said:

Thrugelmir said:

Hi Nunnas22 said:

That's what I thought would be the case, but the wording is very misleading. I think they are trying to put people off!

There'll be many that see the word Holiday and fail to understand the longer term consequences unfortunately. 

What are the longer term consequences? I didn’t think anyone could be penalised for having a mortgage holiday in extra-ordinary times? Taxpayers bail the banks out the banks should show the same compassion to the taxpayers.

The increased debt still needs to be repaid. There's no such thing as a free lunch. Banks are showing flexibility that's compassion. 

The irony is how many free lunches the likes of LBG and RBS group have had on the taxpayer, anyway sorry I thought you were alluding to it being recorded as a negative on credit files, or cause issues credit wise in future - I get the debt has to be paid, surely it wouldn’t be that much on say a 25 year mortgage term. 

Thrugelmir

EverythingIWant said:

Thrugelmir said:

EverythingIWant said:

Thrugelmir said:

Hi Nunnas22 said:

That's what I thought would be the case, but the wording is very misleading. I think they are trying to put people off!

There'll be many that see the word Holiday and fail to understand the longer term consequences unfortunately. 

What are the longer term consequences? I didn’t think anyone could be penalised for having a mortgage holiday in extra-ordinary times? Taxpayers bail the banks out the banks should show the same compassion to the taxpayers.

The increased debt still needs to be repaid. There's no such thing as a free lunch. Banks are showing flexibility that's compassion. 

The irony is how many free lunches the likes of LBG and RBS group have had on the taxpayer, anyway sorry I thought you were alluding to it being recorded as a negative on credit files, or cause issues credit wise in future - I get the debt has to be paid, surely it wouldn’t be that much on say a 25 year mortgage term. 

Appears that the holidays granted for the duration of the crisis will not impact  individuals records.
Lloyds saved HBOS. At the behest of the then Prime Minister. HBOS otherwise could have gone the way of Northern Rock. Unbeknown to the shareholders of Lloyds during the takeover. The Treasury lent Lloyds £25 billion to keep HBOS afloat. Six months after the takeover and finally completing due diligence. Lloyds estimated that some 35% of HBOS's lending was outside it's risk tolerance. Lloyds in effect would never have underwritten that business. 
Lloyds PPI claims are as a result of HBOS's old pretakeover selling culture. After the takeover Llloyds ended up being the 4th largest house builder in the country. As took both equity stakes and ownership of companies to secure debt owed. 
The GFC was far more complex than a few UK banks over extending themselves. The resolution of the GFC hasn't finished yet. Which compounds the crisis now. 

Nunnas22

I'm not expecting a free lunch. I expect the interest to be added to my mortgage. But it is still unclear whether it will just be the interest or the whole payment that gets added to the mortgage total. I am still waiting for clarification from Santander. And as they are a bank, I fear the worst. They will add the whole payment missed to the total, which I think is fundermentally wrong. It should just be the interest.

davidmcn

Nunnas22 said:

I'm not expecting a free lunch. I expect the interest to be added to my mortgage. But it is still unclear whether it will just be the interest or the whole payment that gets added to the mortgage total. I am still waiting for clarification from Santander. And as they are a bank, I fear the worst. They will add the whole payment missed to the total, which I think is fundermentally wrong. It should just be the interest.

It is just the interest. It wouldn't make any sense to add the capital element of your repayment to your existing balance.