Mortgage Moratorium adding 2 and a half years to repayments

As it says.

We took a moratorium on our mortgage a couple of years ago for 6 months. At the time I was told it would be added to the end of our mortgage term but can anyone tell me how it could add 2 and a half years to the repayment.

Mortgage was approx €1200 a month at the time so taking six months off left us owing an extra €7200 which is fair enough and adding some interest fine. But we are now owing approx €28,800 more.

Does this sound right????? Need to contact bank but looking for some info before I do

TIA

Seems a bit high.

People find it hard to understand these figures. But you are comparing 2010 euros with 2030 euros (or whenever you will be making the additional repayments)

If you have 20 years left on the mortgage, you are, in effect, borrowing €7,200 for 20 years. €7,200 @ 4% compound interest over 20 years amounts to €15,800

Look at it another way if you put €7,200 of this money on deposit at 4%, it will be worth €15,800 after 20 years. Check out this Key Post Should I use a lump sum to reduce my mortgage?

If you have 30 years left, it would amount to €23,400.

Did you reduce the repayment as well? If you did, then that alone would extend the term of your loan.

What interest rate are you on?
Did you have arrears at the time which they capitalized?
When did this happen and when was the mortgage due to finish?
What amount was outstanding when you got the moratorium? Did that include arrears?

Brendan

Update: I see that your accountant has already advised you on this issue.

Thank you for your reply Brendan.

Took moratorium circa September 2008 with 10 years left. Owed approx €138,000 at time. Current interest rate is 3.5% (APR 3.55) and due to go up another 0.5% next month.

No we didn't reduce the repayment.

No arrears

With 10 years left at the time of the moratorium, those numbers look wrong.

Brendan

Thanks. Waiting for bank to phone with an appointment to see them.