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Mortgage Holidays
briman4
Posts: 3 Newbie
I want to take a 3 month mortgage holiday due to the current Corona situation.
However, Santander's website states "payments you would have made will be added to your outstanding mortgage balance. This means interest will be charged on this increased amount...".
If, for example, my mortgage balance is £100,000 and my monthly repayment is £1,000. Does the above term mean that my mortgage balance will be £103,000 after the 3 month mortgage holiday? If so, it feels unjust especially as my mortgage is a capital and interest repayment mortgage.
However, Santander's website states "payments you would have made will be added to your outstanding mortgage balance. This means interest will be charged on this increased amount...".
If, for example, my mortgage balance is £100,000 and my monthly repayment is £1,000. Does the above term mean that my mortgage balance will be £103,000 after the 3 month mortgage holiday? If so, it feels unjust especially as my mortgage is a capital and interest repayment mortgage.
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Comments
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No, it means your balance will be £100k plus the 3 months interest.Mortgage started 2020, aiming to clear 31/12/2029.1
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When the holiday finally ends. The balance you then owe will be repaid over the increasing term of the mortgage. Resulting in higher repayments even if interest rates remain static.
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What do you believe would be a 'just' arrangement Briman?I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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