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!!

[7alwje783]

🙄 come on OP, it's been very clear what would happen if you did this. That's why they said only take it if you really need it.

[PinkiOcelot]

@winningwhilstlosing I think people get off on being rude and unkind.

[jillandhersprite]

I've got 2 mortgages - one with a bank and one with a building society. The application process for a payment holiday for both was extremely clear that it means payments will go up, the term is the same and you will have to pay more interest because of the 3 months missed. The NatWest one was online but it was spelled out very clearly. The principality one was over phone but again the agent was very clear.
I am a little bemused that you weren't made aware - unless you didn't read the paperwork you were given either before or after. Both had a cooling off period like most products so you could back out of the payment holiday if you change your mind...

[GeorgeWG]

@Sandybval

To be honest I'm shocked it's £3k just for a few months in interest it obviously wouldn't be free but cripes.

£3k over 3 months = £12k over a year.

That's the equivalent of a £300k mortgage at a rate of 4%, which I think is not unusual.

[winningwhilstlosing]

@PinkiOcelot it certainly seems that way. It reminds me of a time when I was at a very low ebb and posted about something I had done - I was hoping for some kind words, advice or support. Goodness - the vitriol!

[Cartesiandebt]

Wasn't there a thread recently where someone's DH had signed up for an unnecessary mortgage holiday, without telling them?

[ProfessorSlocombe]

No but they might have thought the government were going to subsidise the cost as they have for other measures.

I really hope no one is under the impression the government is subsidising anything. It might look like that, but - as with the OPs mortgage interest - it will all be reclaimed back.

[GreytExpectations]

Yes you have been very naive. Its well publicised across lenders that by taking a mortgage holiday you will incur interest and have to pay more. Why didn't you bother reading up about it before making a decision like that?

[elfycat]

It sounds grim now, but another time, when things are financially better for you think of the savings you can make with a moderate over-payment. Even a few pounds a month soon eat into the interest. For a while I paid £20, then £50 extra per month and at the time the money was a take-away I couldn't have a month. It decreased the mortgage substantially over 5 years.

Maybe not right now. But (disclaimer - eternal optimist) economies recover, recessions and even depressions end. When they do make a tiny over payment and you'll see the opposite from the shock today.

[Quietheart]

@ProfessorSlocombe

No but they might have thought the government were going to subsidise the cost as they have for other measures.

I really hope no one is under the impression the government is subsidising anything. It might look like that, but - as with the OPs mortgage interest - it will all be reclaimed back.

Yes quite we are going to be hammered for this, but for now they are subsidising many.

[Sandybval]

£3k over 3 months = £12k over a year. That's the equivalent of a £300k mortgage at a rate of 4%, which I think is not unusual.

Ah okay that doesn't seem too bad, our mortgage is a lot smaller so I was basing it on that I guess!

[ProfessorSlocombe]

[quote winningwhilstlosing]@PinkiOcelot it certainly seems that way. It reminds me of a time when I was at a very low ebb and posted about something I had done - I was hoping for some kind words, advice or support. Goodness - the vitriol![/quote]
This is AIBU which we are frequently reminded takes no prisoners.

Also I wasn't aware there was a request for help in the OP. It seemed like a (n unjustified) grumble or complaint.

[Snozwanger]

I spoke to my sister last week and she mentioned she's taken a payment holiday. She said it worked out to an extra £10 per months over the rest of the term of the mortgage. I expect yours will be spread out in a similar way.

[isabellerossignol]

Is compound interest taught to all in schools ?

No.

So what hope does someone leaving school have of "picking it up" ?

I see what you're saying but at the same time plenty of people do pick it up. Or more specifically they make a point of finding it out, either by reading up on it or asking someone to explain it.

I worked for years in a bank. People used to flat out refuse to read terms and conditions because they 'couldn't be bothered' etc and even when I tried to explain them they'd say they weren't interested in all that and I'd end up talking away with them rolling their eyes thinking I was rude. But signing away 25 years of your life without giving it even a cursory glance horrified me and there was no way I was going to have someone come back and try to place the blame on me. I got into the habit of leaving the room for a while so that they couldn't sat I stood over them and put pressure on them to sign. Then I'd go back and note the timings in the file so that when they inevitably rang up complaining when the interest rate changed and their payment went up, I could say 'but on 20th July you were given 15 minutes at 3pm to read the terms and then you signed to say you understood them'.

[FTMF30]

@nixen There's absolutely no need to post such a useless and bitchy comment.

OP, let it be a lesson learned that there's usually some kind of catch so read T&A throughly in the future. The extra £3k is spread across your monthly payments so hopefully you haven't been hit too hard.

[cheeseismydownfall]

Fucking hell, there are some nasty people on here. Nowhere has the OP said that she thought she was getting 'free money' - I'm guessing she thought the missed payments would be 'tacked on' to the end of the mortgage and she would just end up paying it back slightly later. She may well have also been aware that there would be some additional interest to pay as a result. But she is taken back by the cost of this additional borrowing, and I bet she isn't alone. She won't be the only person who has had to make financial decisions quickly in a stressful situation without fully understanding the implications.

OP, it does sound like a lot, but you will be able to reduce it a lot if you make some over payments when you can, to offset it. I think the £3000 figure is what you will end up paying if you don't make any additional payments between now and the end of the mortgage to make up for the payments you missed. I'd suggest giving your mortgage company a call to understand your options. There are some good mortgage calculators online that you can use to see the impact of making over payments on the overall amount of interest you are charged.

[OddBoots]

The reverse of this is overpaying if you have a mortgage product that allows you to do this, just a small amount per month early in the mortgage life can save vast amounts over the lifetime of the loan.

I hope this additional debt doesn't add more than you can afford monthly though, if it is going to put you in a tricky position speak to your lender sooner rather than later to see if you can extend the term and keep repayments what they were before the break.

[B1rdbra1n]

assumed that if you take a mortgage holiday, your mortgage would be frozen
really, you thought the bank would do something that reduces their profits
c'mon, they dress it up like a concession but really it means they extract more profit from you, they are the bank...not your mum & dad!

[Yoyoallovertheshow]

@Dingdong99

How much have your payments gone up each month?

[Georgielovespie]

It must feel shit OP, Martin Lewis was all over the newspapers and online telling people not to take the holiday unless they absolutely had to because it didn't freeze anything.

Banks are businesses, they are not in it for their kindness, they are there to make money from you. This is how they do it, yes you can take a holiday but it is going to cost you, not the bank.

Take it as a learning experience.

[DontStandSoClose]

You still owe the money and the added interest, you aren’t getting your mortgage paid for you so I don’t really understand how it’s surprising really? You must know the amount you pay each month and the interest surely?

[thedancingbear]

People are being pricks to the OP for no good reason.

It was a bit of a silly thing to do and the OP no doubt feels like shit about it. Never understood how and why people get thrills out of sticking the boot in while someone's down.

[SurreyHillsGirl]

@winningwhilstlosing
I cannot believe that people are taking such pleasure in another persons misery

Sadly, I can well believe it. This sort of post is like a magnet to the kind of supercilious arsehole who loves nothing more than to belittle and execrate those who they think are beneath their level of superior intelligence. I feel sorry for them. They can't be very happy in RL, to get some sort of faint satisfaction from lambasting strangers on the internet

[OllyBJolly]

Consider the 3k a stupidity tax

Unnecessarily nasty comment.

Banks have moved a long way from being the friendly bank manager in the cupboard who had the customers' best interests at heart (if anyone is old enough to remember that ad? No, just me then..) It is a mistake to take offers on face value but just like the PPI misselling scandal proved, financial institutions do have an implicit duty of care to be more open about charges and consequences.

[BangingOn]

Our bank made the additional costs really clear and we had to tick to say we understood what the increased monthly payment would be before they would give us the holiday. I thought every bank did this?