Mortgage query

JK33 · 7 December 2019 at 10:40PM

I received a letter from my mortgage company to tell me they have made a mistake when calculating my mortgage payments and I have overpaid by £182.50. I asked the bank if this overpayment made any difference to my mortgage term (which has 9 years 9 months left to run). They told me it didn’t make any difference so I asked for my overpayment to be paid into my bank account which they did. However when I checked my account online they have now added £182.50 to my outstanding mortgage balance which I feel is totally wrong. They have admitted it was their mistake yet I will end up paying for their mistake as they have added this to my mortgage. I have an online business and if I overcharge a customer I ‘take the hit’ of how much I have overcharged them but the bank are refusing to reimburse me yet it is their mistake. Your thoughts, views and expertise are very welcome.

getmore4less · 8 December 2019 at 8:06AM

You overpaid your capital by a small amount over a few months.

You asked for the money back that is what they have done.

I have an online business and if I overcharge a customer I ‘take the hit’ of how much I have overcharged them

You don't take any "hit" you just give back the money should not have had in the first place.

There is a difference because your overpayment on the mortgage bought something a reduction in the debt.

Your overcharged customer got nothing for their money.

The equivalent would be if you charged for and sent two items when they only wanted one, they decide they want there money back you get your extra item back.

Same with the mortgage provider you wanted your money back so they get their item back(restore the debt)

julicorn · 8 December 2019 at 8:22AM

It's the equivalent of setting up a savings account you want to pay £300 into every month, and some admin error means you pay in £301 every month. At the end of the year, bank flags up that you've paid more into your savings account than you agreed to, and asks whether you'd prefer for it to stay in your savings account, or if you want that £12 back in your current account.
There's been no loss to you either way, your money is just in a different account.

ACG · 8 December 2019 at 10:33AM

You take the hit if you overcharge someone? Surely the customer is taking the hit if you overcharge them? Or do you mean you refund them the difference? In which case nobody is taking a hit... This is no different.

You overpaid on your mortgage.
You asked for that money back.
They gave it you back.

You are now in the position you would have been had the mistake not happened.

Why would they just give you £180? They made a mistake and have asked if you want to leave it as it is or have the money back, you made your choice and they have done that.

Struggling to see the problem to be honest.

JK33 · 8 December 2019 at 10:43AM

They wrote to me saying it’s their mistake I was completely unaware their calculations were wrong. So even though it’s their mistake I’m still having to pay for their mistake so that’s why I think they should not add this amount to my outstanding balance. If I overpay with British Gas they give me my money back but don’t in another way get that same amount back from me. If I overcharge a customer I pay them back and don’t get that money back from them I’m another way. I do think the bank should pay me £182.50 and it shouldn’t be added on to my outstanding mortgage amount as I’m now paying for their mistake. That is wrong

ACG · 8 December 2019 at 11:02AM

You are looking at it wrong.

If you overpay British Gas you are £182 in credit in effect, they owe you £182. They therefore give you your £182 and you are no longer in credit with them and they no longer owe you money. So that £182 came off your account.

Your Mortgage balance was £182 lower than it should have been, they give it you back and the money comes off your account.

Your British Gas analogy is basically using the same method as the bank uses but you are happy with one doing it and not the other.

Nebulous2 · 8 December 2019 at 1:28PM

Op - I think you’ve misunderstood what happened. You paid more than you needed to in terms of the minimum monthly payment to the lender to repay your mortgage. However that money did not go to the lender themselves. It went into your mortgage account, and would ultimately have saved you money as it would have come of the capital and you would not have needed to pay interest on it.

You chose to take it back, so the lender agreed and took it out of your mortgage account and gave it to you. No-one has taken a hit. The lender made a mistake, told you and when you took the money back you were in the same position as you would have been if the mistake hadn’t happened. If you hadn’t taken it back the mistake would have left you slightly better off.

csgohan4 · 8 December 2019 at 2:09PM

OP what reimbursement are you looking for? The bank made a mistake and gave it back to you.

Adding it to your mortgage account is potentially doing you a favour, given now that saving accounts are at an all time low.

Are you looking for compensation? If you are, you can try and make a complaint and get a token gesture, but compensation generally is to take you back to the position before the mistake. What distress has £182 less for x period has made it for you?

JK33 · 8 December 2019 at 5:34PM

If the bank has made a mistake why can’t they compensate me for £182.50 instead of adding that same amount to my mortgage account? I don’t think anyone is seeing it the way I see it. Of course that money has gone to the lender, they are making money on my mortgage every day. They have given me back money I have overpaid through THEIR mistake, not mine, I was blissfully unaware of this mistake until they told me. Yet they’ve added that amount to my outstanding mortgage account, so I still pay for their mistake. It is totally wrong and they should pay the £182.50, not add it to my outstanding balance. These fat cat bankers have got away with wrong doing for far too long. So in my case they never lose at all, yet I will/do.

csgohan4 · 8 December 2019 at 6:08PM

JK33 wrote: »

If the bank has made a mistake why can’t they compensate me for £182.50 instead of adding that same amount to my mortgage account? I don’t think anyone is seeing it the way I see it. Of course that money has gone to the lender, they are making money on my mortgage every day. They have given me back money I have overpaid through THEIR mistake, not mine, I was blissfully unaware of this mistake until they told me. Yet they’ve added that amount to my outstanding mortgage account, so I still pay for their mistake. It is totally wrong and they should pay the £182.50, not add it to my outstanding balance. These fat cat bankers have got away with wrong doing for far too long. So in my case they never lose at all, yet I will/do.

So they overcaluated your mortgage by 182.5 and they gave it to you back, so what's the problem? instead of reducing your capital you wanted it back to your account you requested.

Bare in mind your mortgage interest rate maybe higher than your savings account interest rate

What are you complaining of now?

These fat cat banks are the same banks who lent you money, would you rather they didn't?

Banks are run by people who can make mistakes, have you ever not made a mistake?

[Deleted User] · 8 December 2019 at 6:08PM

They should have refunded the funds and offered you an amount for inconvenience.

I used to work in complaints for a bank and this type of admin error would be £25 at most unless you could prove some type of financial loss as a result of the error

Sounds like they aren't recalculating rhr interest on the mortgage as a result of the refunding rhe money that was previously sitting in the mortgage and resulting in a lower balance being charged interest on.
Perhaps that's enough to give you the payment you want.

If they have now corrected the error, how much do you feel you are entitled to for distress and inconvenience?

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