Santander mortgage Error 9+ years ago

Hornetmad

Good Evening Everyone,

Was hoping someone can give me some advice of the following Santander error I have been notified of today by letter. 

It’s states that in 2015 I l ended a mortgage early with Santander and took a new one within 3 months and should have been refunded the early exit fee from the original mortgage with in 4 weeks of completing my purchase . It’s now 9 years later and I’m finally finding out about this.

they have offered me my ERC amount plus 8% interest only on the original ERC. 

It also states this offer is full and final. 

I notice that this 8% interest is not compounded. Resulting in quite a reduction over 9 years. 

What’s would your experiences be and recommendations as I believe it should be compounded to reflect the 9 years. 

Thanks Andy 

BarelySentientAI

If you believe it should be compounded, then you should also believe they must use true interest rates for those years, most of which were <1% ?

Hornetmad

Hi, I see the 8% is set by the financial ombudsman for errors resulting in a loss. However my question is this is not a short term loss it’s over 9 years before they have discovered this error. So I would assume it should be compounded? 

Hoenir

Hornetmad said:

I notice that this 8% interest is not compounded. 

That's the rate and calculation prescribed by the Financial Ombudsman Service. If you believe that isn't fair then you are within your rights to decline the offer. Though in making a claim for a higher amount you'll need to justify why. 

sevenhills

Hoenir said:

Hornetmad said:

I notice that this 8% interest is not compounded. 

That's the rate and calculation prescribed by the Financial Ombudsman Service. If you believe that isn't fair then you are within your rights to decline the offer. Though in making a claim for a higher amount you'll need to justify why. 

Lucky to get a refund at all after 9+ years?

Hoenir

sevenhills said:

Hoenir said:

Hornetmad said:

I notice that this 8% interest is not compounded. 

That's the rate and calculation prescribed by the Financial Ombudsman Service. If you believe that isn't fair then you are within your rights to decline the offer. Though in making a claim for a higher amount you'll need to justify why. 

Lucky to get a refund at all after 9+ years?

That's not what I said if reread my words more carefully. 

BikingBud

Try this : https://www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html



It might be a point to have a discussion but as its inflation and not an interest calculator. 

TrickyDicky101

You could calculate what interest you have suffered over that 9 years as a result of maintaining a higher outstanding mortgage balance [that otherwise would have been lower had the ERC been repaid at the time and paid off your mortgage balance].

What were you mortgage rates over that period?  You'd also need to consider the repayments you were making and what mortgage term these were based on as a proportion of the repayments would go towards paying down the excess balance caused by non-repayment of the ERC at the time.

If you have this additional mortgage interest suffered over the 9 years you could then compare to the 8% simple you've been offered and make an informed decision.