Overcharged for a coronavirus mortgage break ?

justworriedabit

Thrugelmir said:

Spadger42 said:

I'm out of here what a waste of time, Thanks to the polite ones who attempted to try but to batesy and billy what a pair you are, keyboard warriors 

All you need do is provide your mortgage details and someone will provide the mathematical workings.  I'm sure many people took a payment holiday in the belief that that could benefit and only now realise how foolish they've been. 

It was not just mortgages, CC's as well. I rang through to the cc people, the automated sytem was very long, get cut off first time second time I must have pressed a button after keying in my card details for a 'payment holiday'  -  got a letter from them re cost - no way i needed a payment holiday and rang them and eventually managed to speak with a real person they insisted that I must have spoken with someone to agree this. I made it clear that if the looked our CC history with them the years we'd been with them  -  the silly woman insisted i must have spoken with someone to get that offr. I then spoke with a manager that agreed there was a "gllitch in the system and this had now been resolved, ie people wee put onto the so called hols buy just going through the automated system

getmore4less

This probably should have been in the mortgage section.



Taking what the OP is questioning and going straight to the Santander link

https://www.santander.co.uk/personal/support/loans-and-mortgages/coronavirus-faq


working through the pull downs

 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.

That is clearly wrong only the interest should be added to the mortgage if there is a payment break and the term reduced by the relevant amount which will put the payment up from its original.

 How will a 3-month payment holiday affect my future mortgage payments? 
our monthly payments will increase due to the additional interest payable as a result of your monthly payments being added to your mortgage balance.
Here are some examples of how a 3-month payment holiday would impact the monthly payment on a repayment mortgage.

Remaining term	Mortgage balance	Interest rate	Monthly increase
25 years	£100,000	4.34%	£9.05
20 years	£100,000	4.34%	£11.82
15 years	£100,000	4.34%	£17.45
10 years	£100,000	4.34%	£32.51
5 years	£100,000	4.34%	£108.73

I have some existing spreadsheets so will use them

Taking the first example £100k 25 years   4.34%

rate	fees	payment	add fees	interest only
4.34%	£0.00	£546.79	£546.79	£361.67

Lets do it properly adding the interest for 3 months compounding and then paying over 24 years 9 months

£100000+£361.67+£362.97+£364.29 = £101,088.93

rate	fees	payment	add fees	interest only
4.34%	£0.00	£555.84	£555.84	£365.60

an increase of £9.05 that matches the table provided by Santander

pretty clear to me they are just supposed to be adding the interest and that is what they intended.



lets look at what people are saying is correct  you add the payment onto the balance.........


adding 3 payments gets £101,640.37 over 24y 9m

rate	fees	payment	add fees	interest only
4.34%	£0.00	£558.87	£558.87	£367.60

that makes the increase £12.08  so something is wrong they don't seem to be doing that in the examples. 


IF the  OP says they have added the full normal payment then they need to discuss this with Santander and get it corrected

but have they


if OP posts their actual mortgage data for before and after the payment holiday

amount, rate, payment, remaining term(to the month) 

I can do the calculations.


reading the posts they say 

£161k mortgage? also says 164 somewhere 
£971  payment

£2910. increase 

they also say the payment went up by £15


need the rate and the full term to do the numbers 



if I do an example for more realistic £161k 16 years 2%  nor far from the op payment of £971

rate	fees	payment	add fees	interest only
2.00%	£0.00	£980.54	£980.54	268.33

adding the interest gets 

£161000+£268.33+£268.78+£269.29=£161806.40  over 15 years 9 months

rate	fees	payment	add fees	interest only
2.00%	£0.00	£998.73	£998.73	269.68

an increase of £18.19 not far off the £15 the OP says they had

Adding 3 full payments would give £163941.62

rate	fees	payment	add fees	interest only
2.00%	£0.00	£1,011.91	£1,011.91	273.24

An increase of £31,37  way more than they say the payment went up.

which suggest that Santander may have actually done the right thing but the communication on the balance may have gone wrong



hope the OP can provide their real numbers to get to the bottom of this.

getmore4less

Batesy1976 said:

justworriedabit said:

Spadger42 said:

I'm out of here what a waste of time, Thanks to the polite ones who attempted to try but to batesy and billy what a pair you are, keyboard warriors 

Hi OP
I've been put off by posting threads on this forum because of the same reason. For some reason you get little groups going around back slapping each other etc when they think they've got one over the OP
IMHO, if you can't help, jog on. No need to be rude, etc.
It does help to share as you said and one of the reasons I post. Writing a post helps me with my thoughts.
I'm put off from posting but if I really need to I will so please do share again if the need is required and like me, just ignore those that have come on to play rather than help.
I hope its worked out for you.

What?  The OP was told correct information and they refused to accept it.

None of what you've said is in any way applicable to this thread.

It's ironic you mention "no need to be rude" when it was the OP that was rude to people who were trying, in vain or seems, to help them by giving them correct information.

The issue is they have been told incorrect information.

Only the interest should be added to the outstanding balance, not the full payment


As the OP correctly says the capital that those three payments would have taken of is still there because the payments were not made, there is no need to add it on again.


The great thing about algorithms is they have to work for all scenario and numbers so we can use simple examples and eliminate some variables.


Since some people are insisting  that it is the full payment that need to be added we can ignore the split of interest and capital and make the interest 0%


Then to make it even simpler we can shorten the full term to say 6 months and have an outstanding debt of £6,000  at £1,000pm, then we stick in a payment holiday of 3 months.


lets look at the 2 options 


1. ONLY add interest 

After 3 months there is no interest to add and the debt sits at £6k the payment goes up to £2kpm for the last 3 months.

2. ADD full payment

After 3 months the debt stands at £9k  and now the last three months is £3kpm



Pretty obvious that the second option is wrong.

 
Only the interest should be added and from the numbers in my previous post as the OP payment only went up ~£15  that is probably what has happened.


Why their capital looks to them to be wrong needs investigating

Thrugelmir

getmore4less said:

Batesy1976 said:

justworriedabit said:

Spadger42 said:

I'm out of here what a waste of time, Thanks to the polite ones who attempted to try but to batesy and billy what a pair you are, keyboard warriors 

Hi OP
I've been put off by posting threads on this forum because of the same reason. For some reason you get little groups going around back slapping each other etc when they think they've got one over the OP
IMHO, if you can't help, jog on. No need to be rude, etc.
It does help to share as you said and one of the reasons I post. Writing a post helps me with my thoughts.
I'm put off from posting but if I really need to I will so please do share again if the need is required and like me, just ignore those that have come on to play rather than help.
I hope its worked out for you.

What?  The OP was told correct information and they refused to accept it.

None of what you've said is in any way applicable to this thread.

It's ironic you mention "no need to be rude" when it was the OP that was rude to people who were trying, in vain or seems, to help them by giving them correct information.

Why their capital looks to them to be wrong needs investigating

That's most likely simply confusion over the terminology used.  The deferred capital repayments being spread over the remaining term (months) of the mortgage.  That's the downside of any payment holiday taken, by default when payments resume the fixed monthly outgoing will rise. The shorter the remaining term of the mortgage the greater the increase will be. 

getmore4less

Thrugelmir said:

getmore4less said:

Batesy1976 said:

justworriedabit said:

Spadger42 said:

I'm out of here what a waste of time, Thanks to the polite ones who attempted to try but to batesy and billy what a pair you are, keyboard warriors 

Hi OP
I've been put off by posting threads on this forum because of the same reason. For some reason you get little groups going around back slapping each other etc when they think they've got one over the OP
IMHO, if you can't help, jog on. No need to be rude, etc.
It does help to share as you said and one of the reasons I post. Writing a post helps me with my thoughts.
I'm put off from posting but if I really need to I will so please do share again if the need is required and like me, just ignore those that have come on to play rather than help.
I hope its worked out for you.

What?  The OP was told correct information and they refused to accept it.

None of what you've said is in any way applicable to this thread.

It's ironic you mention "no need to be rude" when it was the OP that was rude to people who were trying, in vain or seems, to help them by giving them correct information.

Why their capital looks to them to be wrong needs investigating

That's most likely simply confusion over the terminology used.  The deferred capital repayments being spread over the remaining term (months) of the mortgage.  That's the downside of any payment holiday taken, by default when payments resume the fixed monthly outgoing will rise. The shorter the remaining term of the mortgage the greater the increase will be. 

That bit is accepted, even by the OP from what I can see, that the capital missed by those three payments gets spread out over the rest of the term along with the extra added interest.
.

What the op is saying happened is that the capital owed, from the beginning to the end of the 3 month holiday,  went up by more than just adding just the interest.


That would be wrong and needs investigating if it really did happen.



  

Thrugelmir

getmore4less said:

Thrugelmir said:

getmore4less said:

Batesy1976 said:

justworriedabit said:

Spadger42 said:

I'm out of here what a waste of time, Thanks to the polite ones who attempted to try but to batesy and billy what a pair you are, keyboard warriors 

Hi OP
I've been put off by posting threads on this forum because of the same reason. For some reason you get little groups going around back slapping each other etc when they think they've got one over the OP
IMHO, if you can't help, jog on. No need to be rude, etc.
It does help to share as you said and one of the reasons I post. Writing a post helps me with my thoughts.
I'm put off from posting but if I really need to I will so please do share again if the need is required and like me, just ignore those that have come on to play rather than help.
I hope its worked out for you.

What?  The OP was told correct information and they refused to accept it.

None of what you've said is in any way applicable to this thread.

It's ironic you mention "no need to be rude" when it was the OP that was rude to people who were trying, in vain or seems, to help them by giving them correct information.

Why their capital looks to them to be wrong needs investigating

That's most likely simply confusion over the terminology used.  The deferred capital repayments being spread over the remaining term (months) of the mortgage.  That's the downside of any payment holiday taken, by default when payments resume the fixed monthly outgoing will rise. The shorter the remaining term of the mortgage the greater the increase will be. 

That bit is accepted, even by the OP from what I can see, that the capital missed by those three payments gets spread out over the rest of the term along with the extra added interest.
.

What the op is saying happened is that the capital owed, from the beginning to the end of the 3 month holiday,  went up by more than just adding just the interest.


That would be wrong and needs investigating if it really did happen.



  

Unpaid interest will result in a further interest charge every month as compounding kicks in. Extremely likely there has been a miscalculation in what will be a well tested system. Which accounted for arrears and payment holidays etc long before Covid arrived. 

Spadger42

I’m the OP, it was my first post on here looking for some advice, I got some which was appreciated, I also got a couple of people taking the P and clearly in the forum to seek enjoyment out of others problems. I decided to leave the post as it wasn’t turning into what I expected. People saying c*** like I’m wrong and can’t accept it ? If I couldn’t accept it what was I asking the question for ? If I’m wrong I’ll accept it 100% not only because it’s in their policy but because you can’t beat the system. However I’ll fight it because ‘I’ think it’s wrong to make 109% profit in 1 month in a pandemic ! And before you start up with it’s not ! It is ! I’ve had an increase in my mortgage monthly to cover the missed payments, they’ve banged on £3000 to my mortgage balance. If you think it’s write then that’s your opinion. You should be charged the missed interest payments added to the balance and an increase on your monthly mortgage to make up for those missed payments ! You don’t have a credit card add the full missed payment to your credit card do you ! I won’t reply to any posts as the keyboard hero’s were out the other day. As I say my first post in here, you have no idea who I am, how old etc, treat everyone the way you’d like to be treated yourself hero’s. 

Spadger42

getmore4less said:

This probably should have been in the mortgage section.



Taking what the OP is questioning and going straight to the Santander link

https://www.santander.co.uk/personal/support/loans-and-mortgages/coronavirus-faq


working through the pull downs

 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.

That is clearly wrong only the interest should be added to the mortgage if there is a payment break and the term reduced by the relevant amount which will put the payment up from its original.

 How will a 3-month payment holiday affect my future mortgage payments? 
our monthly payments will increase due to the additional interest payable as a result of your monthly payments being added to your mortgage balance.
Here are some examples of how a 3-month payment holiday would impact the monthly payment on a repayment mortgage.

Remaining term	Mortgage balance	Interest rate	Monthly increase
25 years	£100,000	4.34%	£9.05
20 years	£100,000	4.34%	£11.82
15 years	£100,000	4.34%	£17.45
10 years	£100,000	4.34%	£32.51
5 years	£100,000	4.34%	£108.73

I have some existing spreadsheets so will use them

Taking the first example £100k 25 years   4.34%

rate	fees	payment	add fees	interest only
4.34%	£0.00	£546.79	£546.79	£361.67

Lets do it properly adding the interest for 3 months compounding and then paying over 24 years 9 months

£100000+£361.67+£362.97+£364.29 = £101,088.93

rate	fees	payment	add fees	interest only
4.34%	£0.00	£555.84	£555.84	£365.60

an increase of £9.05 that matches the table provided by Santander

pretty clear to me they are just supposed to be adding the interest and that is what they intended.



lets look at what people are saying is correct  you add the payment onto the balance.........


adding 3 payments gets £101,640.37 over 24y 9m

rate	fees	payment	add fees	interest only
4.34%	£0.00	£558.87	£558.87	£367.60

that makes the increase £12.08  so something is wrong they don't seem to be doing that in the examples. 


IF the  OP says they have added the full normal payment then they need to discuss this with Santander and get it corrected

but have they


if OP posts their actual mortgage data for before and after the payment holiday

amount, rate, payment, remaining term(to the month) 

I can do the calculations.


reading the posts they say 

£161k mortgage? also says 164 somewhere 
£971  payment

£2910. increase 

they also say the payment went up by £15


need the rate and the full term to do the numbers 



if I do an example for more realistic £161k 16 years 2%  nor far from the op payment of £971

rate	fees	payment	add fees	interest only
2.00%	£0.00	£980.54	£980.54	268.33

adding the interest gets 

£161000+£268.33+£268.78+£269.29=£161806.40  over 15 years 9 months

rate	fees	payment	add fees	interest only
2.00%	£0.00	£998.73	£998.73	269.68

an increase of £18.19 not far off the £15 the OP says they had

Adding 3 full payments would give £163941.62

rate	fees	payment	add fees	interest only
2.00%	£0.00	£1,011.91	£1,011.91	273.24

An increase of £31,37  way more than they say the payment went up.

which suggest that Santander may have actually done the right thing but the communication on the balance may have gone wrong



hope the OP can provide their real numbers to get to the bottom of this.

Hi mate the payment went up £15 however it did coincide when interest rates went down, within the same month from memory, thanks fist of all for understanding my question, you’ve hit it on the nail. I’m not saying I’m right or wrong or saying it’s an easy thing to understand, however fundamentally you should only have interest missed payments added to your balance and an increase monthly to cover them. Capital added that’s already within the balance is wrong. I can’t get hold of my accounts as I’d have to order them, santander have a cut off on online banking and unfortunately I can only go back as far as last may, saying that I’ve not tried on the pc , I’ll give that a try. I’m not in here to solve my problem per say, I’m doing that through a complaint letter to Santander which is being investigated. I thought it was an anomaly and many others may have fallen so called victim, so highlighting it may help others, only to get smart **** remarks and all kinds of stupid questions. A little click maybe, I’ll go look to see if I can get the March onwards from the pc. 

getmore4less

Thrugelmir said:

getmore4less said:

Thrugelmir said:

getmore4less said:

Batesy1976 said:

justworriedabit said:

Spadger42 said:

I'm out of here what a waste of time, Thanks to the polite ones who attempted to try but to batesy and billy what a pair you are, keyboard warriors 

Hi OP
I've been put off by posting threads on this forum because of the same reason. For some reason you get little groups going around back slapping each other etc when they think they've got one over the OP
IMHO, if you can't help, jog on. No need to be rude, etc.
It does help to share as you said and one of the reasons I post. Writing a post helps me with my thoughts.
I'm put off from posting but if I really need to I will so please do share again if the need is required and like me, just ignore those that have come on to play rather than help.
I hope its worked out for you.

What?  The OP was told correct information and they refused to accept it.

None of what you've said is in any way applicable to this thread.

It's ironic you mention "no need to be rude" when it was the OP that was rude to people who were trying, in vain or seems, to help them by giving them correct information.

Why their capital looks to them to be wrong needs investigating

That's most likely simply confusion over the terminology used.  The deferred capital repayments being spread over the remaining term (months) of the mortgage.  That's the downside of any payment holiday taken, by default when payments resume the fixed monthly outgoing will rise. The shorter the remaining term of the mortgage the greater the increase will be. 

That bit is accepted, even by the OP from what I can see, that the capital missed by those three payments gets spread out over the rest of the term along with the extra added interest.
.

What the op is saying happened is that the capital owed, from the beginning to the end of the 3 month holiday,  went up by more than just adding just the interest.


That would be wrong and needs investigating if it really did happen.



  

Unpaid interest will result in a further interest charge every month as compounding kicks in. Extremely likely there has been a miscalculation in what will be a well tested system. Which accounted for arrears and payment holidays etc long before Covid arrived. 

Interest on interest would only happen for 3 months as shown in my examples, small amounts.


Once the payments restart with a new payment calculated to term  the interest gets paid so the compounding stops.


The increase in payment of £15pm seems about right(give or take a few £) for the amounts involved


The reported increase in capital is not accounted for and is much more than the interest accrued

Spadger42

Should have added with the interest rate going down the increase was about £15 without it would have been about £30 or somewhere about.