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Took a mortgage holiday and now I owe a shed load more!

(259 Posts)
Dingdong99 Mon 22-Jun-20 16:40:12

This is probably very naive of me but I had assumed that if you take a mortgage holiday, your mortgage would be frozen

I've had a 3 month mortgage holiday because of everything going on, and have now restarted again, and had a statement come through to say I owe an additional 3k!!

OP’s posts: |
PotteringAlong Mon 22-Jun-20 16:41:06

Yes, because you’ve accrued interest on the money you owe.

DustyMaiden Mon 22-Jun-20 16:43:00

Sorry, yes that was naive but I’m sure you won’t be alone. I do think the lender should make it clearer.

HollowTalk Mon 22-Jun-20 16:43:16

How long does your mortgage have to go, still? You could be borrowing eg £3K over 20 years. Once things get on an even keel, try to pay a little extra each month.

WhatATimeToBeAlive Mon 22-Jun-20 16:43:57

It's been well publicised that you would pay additional interest, so yes you have been very naive! Martin Lewis was very clear on this, he said only do it if you really have to as the interest would be added on to the rest of the mortgage.

SadSisters Mon 22-Jun-20 16:44:33

That should probably have been more clearly explained to you. If you can spread that £3k out over the remaining term of your mortgage you can hopefully deal with it by paying only a little more each month.

Undervaluedandsad Mon 22-Jun-20 16:44:36

I made that mistake years ago on maternity leave. Is it much more per month?

Starbuggy Mon 22-Jun-20 16:44:51

YABU

Very naive to think you wouldn’t have to pay interest. But presumably it was the least worst option in a shitty situation?

sirfredfredgeorge Mon 22-Jun-20 16:44:52

This is probably very naive of me but I had assumed that if you take a mortgage holiday, your mortgage would be frozen

Did you bother to read any of the details when you applied, or was your mortgage company misleading. I doubt they were - they're not stupid, but if you collect everything you were given when applied for the holiday, you might be able to complain.

imissmydad Mon 22-Jun-20 16:47:03

They must have explained that to you when you applied for the holiday?

Hoppinggreen Mon 22-Jun-20 16:48:12

Yes, that’s how it works

Jimdandy Mon 22-Jun-20 16:49:42

It is a lot extra but don’t worry. Let all this blow over for a year or two then start overpaying? Or even if you start paying after 5 years it will always help.

2bazookas Mon 22-Jun-20 16:53:20

So you didn't read the lenders written explanation before you took the mortgage holiday.

notheragain4 Mon 22-Jun-20 16:53:34

I'm sorry to sound daft, but why is there additional interest? Why is it more than what you've initially borrowed, is it because your term is extended by 3 months? If you were to slightly over pay (basically the equivalent of 3 month) over that period, wouldn't that remove the additional interest?

letmethinkaboutitfornow Mon 22-Jun-20 16:54:13

@Dingdong99 - OP
Could you please check wether they took the three months payment and split evenly across the remaining period?

I know it can look confusing but there is no added interest as they are taking the months you didn’t pay (including interest) and splitting evenly across for each remaining payment so it means your monthly payment goes up but not the overall.
If you are in doubt, contact them online ☺️
Good luck 🍀

rainbowunicorn Mon 22-Jun-20 16:55:37

I think you must not have read the terms and conditions of the mortgage holiday if this has come as a surprise to you. It is clearly shown on the information on my mortgage providers page about taking a mortgage holiday.
I also did a random search on 4 other mortgage providers and again it is clear as day usually within the first couple of sentences.
You can't really complain if you did noyt bother to read what this meant.

seenbeensbean Mon 22-Jun-20 16:56:11

YABU. Of course you are paying more because you have extended the period of the loan.

LordOftheRingz Mon 22-Jun-20 16:58:28

Did you need it or did you do it just in case? Have you saved any of the payments, could you make an overpayment. now?

fivebrokentests Mon 22-Jun-20 16:59:05

Why is it three thousand though? Is your mortgage massive?

DisobedientHamster Mon 22-Jun-20 16:59:47

Duh. LOL @ thinking banks offer free money or freeze interests on the asset they own. Did you lose your job or were you furloughed or became ill? Because taking it for any other reason, it's an expensive lesson to learn. But well, you agreed the terms and conditions. Read the small print.

Nixen Mon 22-Jun-20 17:00:42

🤦🏼‍♀️ Did you think it was free money?
People astound me. Don’t sign things you haven’t read and understood. Consider the 3k a stupidity tax

DisobedientHamster Mon 22-Jun-20 17:02:56

Oh, that's nothing, Nixen, this one caller rang into Martin Lewis complaining that because her landlord had taken a mortgage holiday she shouldn't have to pay rent. Hahaha!

BikeRunSki Mon 22-Jun-20 17:04:01

OP, your mortgage will contain any element of interest (of it may even be interest only, I don’t know, but it won’t have no interest)

Every month you will pay off some interest. If you don’t pay it off, it accrues. You have also extended the term if you mortgage by 3 months, so you will be paying interest for longer.

Shoxfordian Mon 22-Jun-20 17:05:52

Yeah, sorry op but you were still going to accrue interest

plominoagain Mon 22-Jun-20 17:08:17

Sounds like you have a similar mortgage to me then , because I’ve had to do the same as DHs wages tanked . It sounds a lot , but it’s only three months interest . How much time is left on your mortgage ? We’ve got about ten years , and our repayment is only going up by about £40 when we restart it .

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