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

[Dingdong99]

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!!

Mortgage is a debt and the bank charges interest for lending you the money to buy a property.

If you extend your mortgage, your mortgage is therefore longer and you will pay interest for longer, so you will pay more interest.

If you over pay each month (needs to be a mortgage where this is possible) you are then reducing the monthly amounts and as the interest is based on the debt, then the interest payments go down.

OP, if you can't afford the extra 3K, speak to the bank and work out a plan with them. I once got into financial difficulties and spoke to the bank and had my mortgage go from 20 years up to 25 years, this made my monthly payments managable. When my finances improved, I started overpaying every month and I will be mortgage free in a few years.

3 months mortgage that you didn’t pay still needs paying plus the extra interest. Our 3month mortgage holiday cost us 3x £845 (our monthly payment) plus the interest.

Thanks @Pinkbunny2811. I retrained as a citizenship teacher and qualified just as it came off the compulsory subject curriculum. I had planned financial literacy as the core of one year's scheme of work to reinforce the maths department, for the students who were never going to enjoy quadratics or algebra, but who would need decent working arithmetic and enough knowledge to apply it. To the lad who was going to join his dad as a fencing contractor, I said unless you can do the sums, you can't order the right materials or price the job accurately. If you are going to tile bathrooms, you need to understand how tesselations work to get the pattern right. But no, send them all to university to rack up debt that will never be repaid. Cynical? moi?

What were people meant to do though?
The banks and the average person were up against it from the start of this pandemic. Having breathing space from money worries was more important than reading the small prints.
I feel sorry for people who will discover it wasn't 'free ' money at all and had many strings attached. People who had never missed a payment since getting a mortgage.
I hope the banks are supportive , but I guess they won't be forever.
It's another sad situation to be in and not even their fault! I have friends who seem to think the government is giving everyone ' free money' and it'll all be fine. Not so !
I hope you can pay it back in time op.

I feel sorry for people who will discover it wasn't 'free ' money at all

But to be fair they're no worse off than they were before. They're just not better off in the way they thought they'd be.

@TriangularRatbag but they will be worse off as they'll pay interest on the deferred amounts over the remainder of the mortgage term

* OP, if you can't afford the extra 3K, speak to the bank and work out a plan with them. I once got into financial difficulties and spoke to the bank and had my mortgage go from 20 years up to 25 years, this made my monthly payments managable. *

If you do this - please understand that in this scenario you would be paying a LOT more interest!