Around 18,000 customers of the Yorkshire and Clydesdale Bank have been affected by an error in how monthly payments for variable rates were calculated, resulting in underpayments being consistently made.
This means the variable rate customers now have a shortfall on their mortgage account.
The banks say that 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 say they will providing other options, with each customer’s case being reviewed individually so that their full circumstances can be assessed and the most appropriate solution found.
Steve Reid, retail director for Clydesdale Bank, said: “First and foremost we are very sorry that this error has happened and for any inconvenience it may have caused those customers affected.
