Overcharged for a coronavirus mortgage break ?

Spadger42

just so everyone knows this is profiteering
do I still get charged interest on my mortgage ?
Yes, if you take a mortgage payment holiday, we’ll add your monthly payments to your mortgage balance.
The capital and interest, the full amount, which you already owe the capital, so in theory they've doubled the debt.

Spadger42

I should have got a wonga loan.

MH1927

I think you've over simplified and confused yourself, interest is not flat rated across the length of the mortgage. So you are never paying 250 interest, 750 capital across the length of the mortgage.

Spadger42

Will I still be charged interest on my mortgage during my payment holiday?

Yes, if you take a mortgage payment holiday, we’ll add your monthly payments to your mortgage balance. This means that your mortgage balance will increase and the amount of interest you pay will increase for the remaining term of your mortgage. Your monthly payment then increases to reflect this after the payment holiday has ended.
Essentially what that means is, the capital repayment you owed us we've doubled that and added it to your balance along with the monthly payment increase, you owed 160k you now owe 163k and we are charging you an extra monthly fee for that aswell.gr

Jeremy535897

MH1927 said:

The amount of interest on a mortgage isn't charged at a flat rate across its length?

At the start you pay more interest as the amount of capital outstanding is higher, as you get to the end the amount of interest incurred decreases as there is less capital outstanding

You would expect the interest to reduce by about £1 a month because of this on a mortgage this size. It's not the issue here. I could understand it if the balance was an estimate of what would be repaid over time, because the interest on the three missed payments could easily mount up to £3,000 over the remaining life of the mortgage. 

Spadger42

Jeremy I think you and I are right on this but Santander have it in writing they put the full missed payment on the balance, it's wrong and its made them a hell of a lot of money and I will be taking it up with the Ombudsman, in a pandemic when people are struggling to pay the bills they've actually made a profit on essentially £3000 worth of missed payments of 100%, its wrong very wrong.

Spadger42

Now I'm thinking out loud here, I havent received any extra money from Santander, no further advances of capital, would I be right in saying to do so I'd have to sign an agreement ?

Batesy1976

Spadger42 said:

Now I'm thinking out loud here, I havent received any extra money from Santander, no further advances of capital, would I be right in saying to do so I'd have to sign an agreement ?

There is no point in discussing hypotheticals that are irrelevant to your situation.

Spadger42

The Relevance being if the bank are saying they are charging me for capital interest that's already within the mortgage and they are charging both ie the capital already within the mortgage and the new capital they've added then surely I should have received the capital ! But I take your point, I think this is a job for the financial ombudsman to look at. I'd be interested to know anybody else who's had a coronavirus mortgage break, not necessarily with Santander.

MattMattMattUK

The issue is not the mortgage holiday, the methodology for how interest would be charged was set our, you are not being penalised, they are not profiteering, the issue is that you do not understand your mortgage or the payment holiday.