Hi Lorry
I sent a complaint letter requesting further information and the capital shortfall is around 50k.
What does this mean?
You borrowed, say €200k and you thought and the bank thought, that the mortgage was interest only. You were happy with this. The bank was happy with this.
If you have paid the interest in full, the amount you owe today is still €200k - there is no capital shortfall.
If you had paid capital and interest, the mortgage today might be €150k. But that does not mean that there is a capital shortfall. It just means that you did not pay any capital.
You have not been overcharged or undercharged.
Assuming that you cannot or don't want to pay €1,700 next month, you should write to them insisting that they make no change until this is resolved. If they charge you €1,700 and you can't pay it, your ICB record will be damaged.
So the first thing to do is to make sure that they extend the interest only by a further 6 months while you negotiate an agreement.
The second thing is to get the contract and see what has been agreed.
At that stage, the bank will do some sort of rescheduling with you, but they do have a right to switch it to interest and capital.
What rate are you being charged? If it's a cheap tracker, you have gained enormously from their mistake.
Brendan