Overcharged for a coronavirus mortgage break ?

Billy_B_North

Spadger42 said:

The fact being they have allowed 3 months of a £970 payment break and charged me 3x£970 for having it as well as that already within the mortgage so in effect i've gone backwards nearly £3000 when it should have been just the interest, I know it's difficult to follow, it took me a while to understand it had happened.
Lets say its a credit card holiday of 3 months and you were supposed to be paying £400 a month, wouldn't you be a pxxxd off if your balance had gone up £1200.

It would have only been the interest if you’d extended your term. As you haven’t you need to make up the missed payments in full, plus interest.

Spadger42

Batesey according to the money advice service that's not true at all, 
this is what should occur

Example 1. You've £100,000 left on your mortgage at a rate of 3% over 15 years

You pay £691 per month, and within that is about £250 per month of interest. So on the three-month payment holiday, you'll have an extra £750 of interest. This will then be spread over the rest of the term.

After the holiday, you'll owe £100,750 over 14 years and nine months, meaning a monthly payment of £705. That's an extra £14 every month.

Not the Capital

Batesy1976

Spadger42 said:

Batesey according to the money advice service that's not true at all, 
this is what should occur

Example 1. You've £100,000 left on your mortgage at a rate of 3% over 15 years

You pay £691 per month, and within that is about £250 per month of interest. So on the three-month payment holiday, you'll have an extra £750 of interest. This will then be spread over the rest of the term.

After the holiday, you'll owe £100,750 over 14 years and nine months, meaning a monthly payment of £705. That's an extra £14 every month.

Not the Capital

£14 over 14 years 9 months is £2478.  The original monthly repayment was £691.  2478/691 is a little over 3.5.

So you'll repay an additional 3.5 months worth of repayments which is the same as what Santander are doing.

If you don't believe me, take those hypothetical MSE figures and put them in a mortgage calculator.  Take the capital (100,000) and add three months of repayments (2073) and then work out the monthly repayments on that (unfortunately they don't seem to do months and year so you'll have to pick a whole year number.) You'll find that the numbers are the same as the ones that MSE gave, i.e. it is the correct way to deal with a mortgage repayment holiday mathematically.

Billy_B_North

Spadger42 said:

Batesey according to the money advice service that's not true at all, 
this is what should occur

Example 1. You've £100,000 left on your mortgage at a rate of 3% over 15 years

You pay £691 per month, and within that is about £250 per month of interest. So on the three-month payment holiday, you'll have an extra £750 of interest. This will then be spread over the rest of the term.

After the holiday, you'll owe £100,750 over 14 years and nine months, meaning a monthly payment of £705. That's an extra £14 every month.

Not the Capital

Given how you know better than everyone else on here, including people like me who’ve traded interest rates for decades, you may as well just move ahead with an official complaint. When that fails you can go to the Ombudsman, and when they reject your claim you can try a private prosecution.

Another option of course is to just give all of the numbers that people have asked for rather than repeatedly refusing to do so and insisting that you are right and everyone else is wrong.

If it turns out that you actually are right then you may even get people willing to help you to avoid needing to ever get as far as the ombudsman.

unholyangel

I've missed quite a few posts so apologies if someone else already covered it but....

Unless you are going to bring your mortgage back up to date at the end of the 3 months then it's not just 3 months extra interest you owe them. It's interest on the missed capital for the remainder of the mortgage term. 

GingerTim

It's okay to admit you are wrong, you know.

Batesy1976

unholyangel said:

I've missed quite a few posts so apologies if someone else already covered it but....

Unless you are going to bring your mortgage back up to date at the end of the 3 months then it's not just 3 months extra interest you owe them. It's interest on the missed capital for the remainder of the mortgage term. 

I think the OP is aware of that.

They seem to be getting bent out of share purely on the way Santander have accounted for the holiday, by sticking 3 months worth of repayments on the outstanding capital.  It all works out, and as I tried to explain to them they can put the figures through a mortgage calculator to see that it does, but they won't have it so...  *shrug*

unholyangel

Batesy1976 said:

unholyangel said:

I've missed quite a few posts so apologies if someone else already covered it but....

Unless you are going to bring your mortgage back up to date at the end of the 3 months then it's not just 3 months extra interest you owe them. It's interest on the missed capital for the remainder of the mortgage term. 

I think the OP is aware of that.

They seem to be getting bent out of share purely on the way Santander have accounted for the holiday, by sticking 3 months worth of repayments on the outstanding capital.  It all works out, and as I tried to explain to them they can put the figures through a mortgage calculator to see that it does, but they won't have it so...  *shrug*

I don't think they are. Else they wouldn't have expected the balance (in their hypothetical scenario) to be 100,750. 

Even the way I've phrased it isn't exactly right, just kept it simple in aims of clarity. 

Batesy1976

unholyangel said:

Batesy1976 said:

unholyangel said:

I've missed quite a few posts so apologies if someone else already covered it but....

Unless you are going to bring your mortgage back up to date at the end of the 3 months then it's not just 3 months extra interest you owe them. It's interest on the missed capital for the remainder of the mortgage term. 

I think the OP is aware of that.

They seem to be getting bent out of share purely on the way Santander have accounted for the holiday, by sticking 3 months worth of repayments on the outstanding capital.  It all works out, and as I tried to explain to them they can put the figures through a mortgage calculator to see that it does, but they won't have it so...  *shrug*

I don't think they are. Else they wouldn't have expected the balance (in their hypothetical scenario) to be 100,750. 

Even the way I've phrased it isn't exactly right, just kept it simple in aims of clarity. 

Well perhaps. They seem to accept that they should be paying more, but they do also seem to think they've been charged a penalty of three months payments or something.  And they definitely don't seem to like the money, whatever it is, being added to the capital.

Either way, I'm not sure there's much point in dicusssing it further, the OP has been given a link to the Money Advice Service that confirms this is the correct way of doing it, the MSE link they themselves posted actually agrees with this too (as I explained to the OP in one of my posts) and I pointed to mortgage calculators that the OP can use to see that the way it's been done is correct and works out.  They've even had multiple posters just tell them it's right.

None of it is enough apparently.

I suspect in reality the OP has put the figures through a calculator, realised they were wrong all along and their last post was an attempt to save face but we'll probably never find out.

silvercar

What’s confusing for Spadger, is that if he were to ask for a redemption figure for his mortgage before the mortgage holiday it would have been 164k, now it looks like it will be 167k. So his total mortgage has shot up by 3k.
if his lender had given the option of extending. The mortgage term by 3 months and keeping the repayments the same, though adding on 3 months of interest, it would have been more easily understood and more palatable.
by keeping the term the same, the missing capital repayments each month need to be made up and that increases the monthly repayments. The monthly repayments now need to increase to cover the interest not paid and the capital not repaid. So you have the 3 lots of unpaid capital that were in those missed payments and the interest on the whole mortgage.