As if people aren’t struggling enough to balance their finances, some 18,000 customers who took out variable rate and tracker mortgages with the Yorkshire and Clydesdale Bank have now been informed that the bank miscalculated their repayments and they have a shortfall on their account.

The National Australia Bank owned institutions said the mistake was exacerbated by the unprecedented falls in interest rates last year. All of the affected customers have received a letter from the banks apologising for the mistake and suggesting ways to make up the shortfall.

For about 50% of those affected, a monthly repayment increase of less than £25 will make up the shortfall. However, for other people, including freelancers with a contractor mortgage, the monthly increase is as large as £300 and this is understandably causing them great concern. The banks have offered other repayment options to customers such as extending their mortgage term or making a one-off payment to cover the arrears.

Not surprisingly many business bank account customers are extremely angry and don’t see why they should have to pay for the bank’s mistake. About 10,000 of those affected bank with the Clydesdale in Scotland and many are already demanding compensation. Nominal compensation has already been offered in some cases but the bank is coming under increased pressure to make greater concessions, especially in cases where the increased payments will force customers into financial difficulties.

Meanwhile, homeowners who are struggling to meet their mortgage repayments will receive less assistance from the government. The Mortgage Support Scheme is going to be scrapped in 2011 and the Mortgage Rescue Scheme is going to be scaled back.

The Mortgage Support Scheme was introduced by the Labour government in April 2009 to fund reductions in interest repayments but since its launch only 34 people have received help.

The Mortgage Rescue Scheme, on the other hand, has helped 629 people sell all or part of their property to their local council or housing association and remain in it as a tenant. The government intends to reduce the portion of funding per house from 65% to 55%.

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