Error in mortgage payment calculation
Clydesdale (cbonline.co.uk) and Yorkshire (ybonline.co.uk) Banks are nearing completion of a mailing to approximately 18,000 variable rate mortgage customers apologising for an error in how their monthly payments were calculated, resulting in an underpayment occurring.
The Banks are obviously very sorry that this error has happened and for the inconvenience that this may have caused. The calculation has been corrected and the Banks have written to affected customers to apologise and suggest ways to return their accounts to the position they would have been in had this not occurred. The Banks are now focused on working with each customer to remedy the situation in the most appropriate way for their individual circumstances.
This calculating error, exacerbated by last year’s unprecedented falls in interest rates, led to the bank collecting less than the contractual minimum monthly payment required for customers to pay their mortgage within their agreed term. This means that the affected customers have been underpaying and now have a shortfall on their mortgage account.
The new regular payments, suggested to customers in their individual letter, reflect the correct monthly payment, plus an amount to eliminate any shortfall caused by the previous underpayments. For around half of the customers who have been underpaying, the total suggested increase is less than £25 a month (of which around £2 is to cover the shortfall). If the suggested payment is not suitable for the customer the Banks are providing other flexible options, with each customer’s case being reviewed individually so that their full circumstances can be assessed and the most appropriate solution found.
The vast majority of Clydesdale and Yorkshire Bank mortgage customers are not affected by this issue and customers need take no action. Of those affected, 99 percent have already received their letter advising them of this. The remaining 1 percent (around 180 customers) will receive their letter in the next couple of weeks apologising and providing options to bring their account back on track.
