ISA mortgage shortfall

carl310166

A friend of mine is aware that i am in the middle of an endowment shortfall claim at the moment.He mentioned that he received a letter from the Halifax,to say his ISA repayment vehicle will not cover his mortgage.He told me that the salesman told him,"your mortage will be paid off in 12 years" (i don't know any details of his mortgage). They mentioned in the letter,that he has three? options,and one of them is to complain,would this be very similar to an endowment claim? from what he told me,he was not made aware of the risks,but i didn't get a chance to talk to him for long,so i don't know if he was given projections etc,but basically,if he wanted to claim,would it be through the same system as the endowments?

Thanks in advance.

dunstonh

Its no surprise that an ISA linked mortgage is showing a potential shortfall. However, unlike an endowment, I would have less concern. The events over the last few years would put the ISA into a situation where projections would show a shortfall but those events are a Godsend to anyone with an regular contribution ISA and a long term left.

from what he told me,he was not made aware of the risks,

The ISA illustration would have used 5%, 7% and 9% on its initial projections. The 5% projection would have shown a shortfall as most ISAs linked to mortgages worked on the 7% figure.

If he wants to complain about it, he can. However, his position is likely to be quite good. Indeed, I reviewed one of my ISA mortgage clients last week and his position was 31% up on where he would have been with a repayment mortgage. I have just checked another client now (because of this post) and they are on track to repay theirs in 2008 instead of 2016.

I suggest he gets the ISA reviewed by an IFA and then the discussion about its suitability and complaint can be considered after it has been reviewed.