In 2004 I took out an investment mortgage with a bank who is currently in the process of exiting the Irish market. I signed up to the their letter of offer (mortgage contract) whereby I would pay interest only for the first 5 years and then the mortgage repayments would revert to capital and interest for the remaining 20 years. On the mortgage contract it states that the estimated total amount repayable is €360,000. I signed up to pay my mortgage by direct debit and I expected the Bank to debit my account with the correct amount as the repayments fell due.
In 2013 I got a letter out of the blue stating that the mortgage did not revert to capital and interest in 2009 owing to an IT systems error and to ensure that I met my mortgage commitments are per my mortgage contract my repayments would increase by over 100% from €860 to €1,700. For the last 5 years I have paid almost 45,000 in interest only payments. As a result of the Banks error I have calculated that the estimated total amount repayable will rise to €405,000 because of their error. While I understand that the total amount repayable and the cost of credit can change on foot of interest rate changes I do not think it is acceptable that the total amount repayable increases because of their systems error.
As far as I am concerned I signed up to pay interest only for 5 years and capital and interest for the remaining 20 years. Because of the Banks system errors they have not applied my mortgage repayments to my mortgage account as per the letter of offer. Surely its reasonable to expect that the Bank should retrospectively apply the 45,000 I have paid over the last 5 years to my mortgage account to pay off capital and interest as per the mortgage contract.
At the moment the Bank are stating that I have a capital shortfall of 40,000 but if they applied the money I have paid corrctly to my account the outstanding balance would reduce by approximately 30,000. I have had numerous discussions with the Bank over their error but all they have offered is a term extension and in this case the total amount repayable will rise to 448,000. Any advice would be appreciated? Thanks
In 2013 I got a letter out of the blue stating that the mortgage did not revert to capital and interest in 2009 owing to an IT systems error and to ensure that I met my mortgage commitments are per my mortgage contract my repayments would increase by over 100% from €860 to €1,700. For the last 5 years I have paid almost 45,000 in interest only payments. As a result of the Banks error I have calculated that the estimated total amount repayable will rise to €405,000 because of their error. While I understand that the total amount repayable and the cost of credit can change on foot of interest rate changes I do not think it is acceptable that the total amount repayable increases because of their systems error.
As far as I am concerned I signed up to pay interest only for 5 years and capital and interest for the remaining 20 years. Because of the Banks system errors they have not applied my mortgage repayments to my mortgage account as per the letter of offer. Surely its reasonable to expect that the Bank should retrospectively apply the 45,000 I have paid over the last 5 years to my mortgage account to pay off capital and interest as per the mortgage contract.
At the moment the Bank are stating that I have a capital shortfall of 40,000 but if they applied the money I have paid corrctly to my account the outstanding balance would reduce by approximately 30,000. I have had numerous discussions with the Bank over their error but all they have offered is a term extension and in this case the total amount repayable will rise to 448,000. Any advice would be appreciated? Thanks