Mortgage mistake by bank.

I had posted this on Boards.ie but only got one reply, I am going into the bank tomorrow and just want to clarify any advice. Its a long one thanks for reading,

One year ago last month we bought a 2 bedhouse on a 5 year interest only buy to let for 85% of the purchase price, the mortgage was...€137,700. We signed all the documentation and rented it out.
It was our 2nd investment property + our own home.
The rents where paid into our current account and the 3 mortgages come out every month.
We thought everything was working well until early summer when we checked our statement only to find that the bank was only taking €92 a month out for the newer house/month. I realise that people might find it hard to believe that we didnt realise but we just go to the cash machine and if our balance is healthy (€1,000 +) we are happy and get on with life.

When we realised we went to see the manager that day !!!
She ended up ringing some head manager in Scotland after realising they had a mistake on their system...it stated that €110,000 had been paid back and they where charging us for the balance.
She stated that if we hadn't come in they probably would not have picked up the mistake and the bank would rectify everything immediatly.
I said that I did not expect to pay for the 4 months that had elasped and she said she would look into it.

We heard nothing from the bank but the balance of our current account seemed to take a hit, we had a berevement in june and difficult working situation arrose.
So....in October we got a bank statement and realised the situation was still the same...we decided to do nothing but started taking the money that should have been paid out ourselves and putting it away in case we got a large bill.

A couple of days before christmas we got a mortgage statement in the post...(my wife says it is the first letter we have ever got about this house)....is stated that the balance has gone from €137,700 to €143,048 ....no demand for payment.

We decided not to worry over the christmas ( the house is empty at the moment) and deal with it in the new year..I want to try to deal with this the best way for us , it might sound like it is, but we are not wealthy, just would like some advice.

Does the fact that no bill or correspondance whatsoever make any difference ?

Many thanks for taking the time to read this.

What exactly are you hoping for?

I suppose the least you should get is that if you pay the money, which should have gone off the mortgage, now that you would be in exactly the same position as if you had been paying on a monthly basis i.e. no additional interest incurred.

What exactly are you hoping for?

Click to expand...

I just want to try to make the best of this situation and if anyone had experience of this from either the customer or bank side... maybe to start a new 5year interest only at the new rate of 142,000

So unpaid interest has accrued on the house and you're looking for a way to pay this interest?

Really unsure what you want to hear. As far as I see it you either pay the missed payments and ensure the interest is calculated as it would have been if you had been making the payments or alternatively the missed payments (plus or minus the interest as I'm unsure from reading your post) are added onto the existing balance as the bank has suggested.

Regarding a new rate this will be at the discretion of the bank. For the record your house can't be your second investment property and your own home. It can be either an investment property or your family home and usually different interest rates apply depending on the type of property.

sorry for any confusion...the mortgage is 5 year interest only origionally at 137k.80% of the value.
The problem as you have pointed out is I'm unsure what I wanted.

I think that asking to pay the missed payments ensuring that the interest is calculated as it would have been if the payments had been made is a better option than starting a new mortgage (143k interest free for 5 years)

thanks for taking the time to reply