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Thousands hit by mortgage repayment error

Thousands of mortgage holders are facing huge rises in their monthly repayments thanks to a banking error.

Customers of the Yorkshire and Clydesdale Bank have been left with a shortfall on their variable rate mortgages after the bank miscalculated their monthly repayments.

The bank said 18,000 customers had paid less than the contractual minimum monthly repayments needed to pay their mortgage within the agreed term.

It said historically low Bank of England interest base rates had exacerbated the problem.

Affected customers, two thirds of whom are Clydesdale customers in Scotland and the remainder Yorkshire customers in England and Wales, have now been asked to pay the correct monthly amount, plus an additional monthly sum to meet the shortfall.

While around half of the customers - some 9,000 people - have been asked to pay an increase of less than £25 a month, the rest face soaring repayments of up to £300 a month.

One mortgage payer, writing on a forum hosted by website moneysavingexpert.com, said she had been asked to pay a shortfall of more than £3,000.

She said: "They are asking for an extra £200 per month for the remaining nine years of our mortgage. This is in excess of £21,000. How is this possible?"

A spokesman for the bank said the "vast majority" of mortgage customers were not affected by the issue, but around 180 customers had not yet been told they had underpaid.