What do you think of this rescheduled payments offer?

Carolina

Registered User
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75
Relative of mine is having difficulty paying her mortgage and has been offered rescheduled terms.

The amount owed is 300K. Interest is 4%. Term is 33 years. Monthly payment is 1,360.

The bank has offered in writing to reduce payments to 1K/ month for a year but then the payments will increase to 1,700/month for the next 32 years.

This will increase the amount repayable by 120K. I calculate that the new interest rate will be nearly 6%. The offer letter has no mention of the new rate.

To me this seems like a criminally unfair deal. My relative would get her mortgage reduced by a total of about 4K for 1 year in exchange for paying back an extra 120K over the next 32 years. How can this even be legal?
 
If your relative is reducing to € 1k per month it looks like this is interest only. So the second year repayment (300k @ 4% over 32 years) should only be about € 1400 per month and not € 1700.
So I would not accept the repayments schedule based on the info your relative provided.
 
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