# Covid Mortgage Moratorium charges



## PantoneWarmGrey (6 May 2020)

Hi there,
new to the forum so hopefully I'm posting this in the right place?

Long story short, my partner and I have a mortgage with a non-bank lender. They agreed to give us a 3 month break for Covid (like regular banks) and quoted €2393 as the 'cost of credit'. However, they also said that our monthly repayments would go up by €29. We have 256 months left to run on our morning. When I multiply 29 x 256 I get €7424.... Is THAT not the real cost? I'm confused and would love it if someone could explain this to me. Thanks!


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## RedOnion (6 May 2020)

It's probably somewhere in between.
The 'cost of credit' is just the interest cost of the deferred payment. The 29 per month includes the extra interest, and the 3 missed capital payments spread out over the remaining months.
Do you mind sharing your balance, and interest rate and I'll have a look at it for you? I've been meaning to play around with an example.


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## michaelm (6 May 2020)

My rudimentary brain suggests that if the total extra is 7424 and the interest is 2393 then the skipped payments amount to 5031 . . so your usual payment is circa 1677.  Ultimately then it will cost you 2393 extra interest to pay these 3 payments over 10 years.  Open to correction as I'm not as tuned into how mortgages calculations work as I should be.


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## PantoneWarmGrey (6 May 2020)

Thanks so much for the responses @RedOnion and @Michael. I think that more or less makes sense now.
In case you want to play around a bit more @RedOnion, the balance is 252,933 and interest rate is 4.5%
Thanks again.


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## RedOnion (6 May 2020)

Hi, I'm not able to get the exact same answer, but roughly speaking it's extra payments minus the missed repayments, as outlined by Michael above.

 (29*256) - (3* missed repayment). 

I'm getting just over 2,500 as total cost of credit, but I could have the incorrect repayment amount (I'm assuming 256 months left after the 3 months moratorium).


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## PantoneWarmGrey (6 May 2020)

Thanks guys, that all makes sense now. Pity we have such a high interest rate


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